by Michael Seibel9/28/2018
As YC grows, founders are wondering how it’s improved over time. This is a valid line of questioning – clearly much has changed about YC over 13 years. We have new leadership, much larger batch sizes, we invest more money, we have a growth fund, a series A program, a massive MOOC, and an internal social network for YC founders named Bookface.
I suspect people think YC was better in the early days because some companies from that era are now household names like: Airbnb (w2009) and Dropbox (s2007). However, in reality it often takes 10 years or more for startups to achieve that sort of impact. Even so, in the past 5 years we have funded a number of startups worth noting, including: Coinbase (s2012), Cruise (w2014), DoorDash (w2013), Flexport (w2014), Ginkgo Bioworks (s2014), Gitlab (w2015), Gusto (w2012), Instacart (w2012), Podium (w2016), Rappi (s2016), Rigetti Computing (s2014), and Zenefits (w2013).
Having done YC in 2007 with Justin.tv/Twitch, in 2012 with Socialcam, and joining as a partner in 2014, I thought it would be helpful to describe how YC has changed since I first took part in the program.
In 2007, if you wanted advice, you sent an email to PG and waited for a reply. Now we have software for booking office hours with partners. And it’s also likely that you’re in a chat group with your YC partners so you can message them in real time.
In 2007, if you needed advice or intros from YC alumni or batchmates, you sent out an email to the entire alumni list. Now you post to Bookface and get replies within a day.
In 2007, if you had a B2B startup, you had to reach out cold to potential customers. Now there are over 1000 YC companies you can sell your service to and all of their contact information is in Bookface. As a result, YC alumni companies are often over 50% of your new sales during YC.
In 2007, there were 50 investors in the room for our Demo Day. My company, Justin.tv/Twitch landed a grand total of three angel meetings and was able to raise $150K at a $3.5M valuation. Today, 600-800 investors attend demo day1 and a thousand more watch online. A typical company in the batch raises $500K-3M at a $6M-15M valuation.2
In 2007, if you wanted to raise a Series A, your batchmates/friends/PG would provide intros. Now we have the Series A program that helps evaluate if you are ready to raise, helps you craft your story, allows you to meet and learn from other companies also raising their Series A, and helps you understand and negotiate your term sheets.
In 2007, if you needed help scaling your organization, you could reach out to a batchmate or alumni friend who was slightly further along than you. Now there’s a YC Growth Program where you’re batched with companies at your stage and aided by much more experienced YC founders and advisors.
In 2007, the YC Standard deal was about $20,000 for 7% of your company. Now it’s $150,000 for 7%.
For me, there were two amazing things in the early days of YC that are different today. First, in 2007, batches were much smaller so it was easier to meet all of your batchmates. Today, you have to work harder to meet and become friends with all the talented people in your batch. We put companies into groups of about 30-40 in order to replicate the feeling of the past. Second, getting to work directly with PG was special.
So when thinking about whether to apply to YC and talking to alumni who have attended in years past, keep the above changes in mind. Having been a multiple time user of YC myself (and I know I am biased), I can honestly say without a doubt that I would prefer participating in today’s program because of all the additional value that has been built over the past 13 years.
Counterintuitively, the 7% you give to YC today becomes a better and better deal every year of your company’s life because every year we add hundreds of incredibly talented motivated founders from all over the world, new software, new programming, and new changes based on the feedback of our 4000+ alumni. I think of YC as an amazing piece of software that gets better every year and remains the same price.
1. Demo day is now 4 days long. Day 1 is YC alumni demo day and YC alumni invest about 20% of the dollars that YC companies raise. Day 2 & 3 are investor demo days and Day 4 is investor day where we arrange over 1000 meetings between investors and YC companies.↩
2. Starting in the w2019 batch, we are moving to a post money SAFE standard. Stating the typical valuations in post money terms, YC companies are now raising at $6.5m-$18m valuations.↩
Thanks to Craig Cannon, Geoff Ralston, Jon Levy, and Kat Manalac for reading drafts of this post.
Michael Seibel is a Group Partner and Managing Director, Early Stage at YC. He was the cofounder and CEO Justin.tv and Socialcam. Socialcam sold to Autodesk in 2012 and Justin.tv became Twitch.