|Type||Limited liability company|
|Founders||Paul Graham, Jessica Livingston, Robert Morris, Trevor Blackwell|
Number of locations
|2 offices (2014)|
|Products||Venture capital, Investments|
Y Combinator (YC) is an American technology startup accelerator launched in March 2005. It has been used to launch more than 3,000 companies, including Stripe, Airbnb, Cruise, PagerDuty, DoorDash, Coinbase, Instacart, Dropbox, Twitch, and Reddit. The combined valuation of the top YC companies was more than $300 billion by January 2021. The company's accelerator program started in Boston and Mountain View, relocated to San Francisco in 2019, and has been entirely online since the start of the COVID-19 pandemic. It's considered to be one of the most successful startup accelerators in Silicon Valley.
From 2005 to 2008, one program was in Cambridge, Massachusetts, and one was in Mountain View, California. As Y Combinator grew to 40 investments per year, running two programs became too much. In January 2009, Y Combinator announced that the Cambridge program would be closed and all future programs would be in Silicon Valley.
In 2009, Sequoia Capital led the $2 million investment round into an entity of Y Combinator to enable it to invest in approximately 60 companies a year. In 2010, Sequoia led an $8.25 million funding round for Y Combinator to further increase the number of startups the company could fund.
In 2011, Yuri Milner and SV Angel offered every Y Combinator company a $150,000 convertible note investment. The amount put into each company was changed to $80,000 when Start Fund was renewed.
In 2014, Altman announced a partnership with Transcriptic to provide increased support for Y Combinator's growing community of biotech companies. In 2015, he announced a partnership with Bolt and increased support for hardware companies.
The YC Fellowship Program was announced in July 2015, with the goal of funding companies at the idea or prototype stage. The first batch of YC Fellowship included 32 companies that received an equity-free grant instead of an investment.
In January 2016, Y Combinator changed the fellowship program, with participating companies receiving $20k investment for a 1.5 percent equity stake. The equity stake is structured as a convertible security that converts into shares only if a company has an initial public offering (IPO), or a funding event or acquisition that values the company at $100 million or more. The fellowship was discontinued in 2017.
In 2016, Y Combinator announced that YC partners would visit 11 countries to meet with founders and learn more about how they could be helpful to international startup communities. Those 11 countries were Nigeria, Denmark, Portugal, Sweden, Germany, Russia, Argentina, Chile, Mexico, Israel, and India.
In 2016, Altman left Y Combinator, becoming president of YC Group, which includes Y Combinator. Former Twitter chief financial officer and chief operating officer Ali Rowghani, who was in charge of the YC Continuity Fund when it began, became CEO of YC Continuity. Michael Seibel, who co-founded Justin.tv, became CEO of YC Core, the program that Paul Buchheit had run since 2016.
In 2017, Y Combinator began Startup School, an online course that released public videos and coached individual startups. More than 1500 startups graduated the program in its first year.
In 2018, Y Combinator announced a new batch of startup school. After a software glitch, all 15,000 startups that applied to the program were accepted, only to learn a few hours later that they had been rejected. But the ensuing outcry led Y Combinator to change course again and decided over an official blog to finally accept all those 15,000 companies. Now, every company is accepted to join YC Startup School without any restrictions.
On 20 April 2020, Michael Seibel announced that the summer 2020 ("S20") will be fully remote, due to the COVID-19 pandemic. This includes interviews for the batch, office hours, evening talks, and meetups throughout the batch.
Y Combinator interviews and selects two or more batches of companies per year. The companies receive seed money, advice, and connections in exchange for 7% equity of the company. The program includes "office hours", where startup founders meet individually and group meetings. Founders also participate in weekly dinners where guests from the Silicon Valley ecosystem (successful entrepreneurs, venture capitalists, etc.) speak to the founders.
Y Combinator's motto is "Make Something People Want." The program teaches founders to market their product, team and market, refining their business model, achieving product/market fit, and scaling the startup into a high growth business, etc. The program ends with Demo Day, where startups present their business and sometimes technology to potential investors.
The Y combinator operates an additional program and fund designed to support and invest in startups which have already graduated from the main accelerator program. The YC Growth Program and YC Continuity fund are operated by the same team and focus on helping fast growing startups which are approaching 50 employees, and startups raising their Series B funding of $20 million to $100 million. The YC Continuity fund also occasionally makes investments in companies which did not participate in Y Combinator's accelerator program, however, that is not the main goal of the fund.
Y Combinator has introduced additional programs since 2015, including:
- In July 2015, Y Combinator introduced the YC Fellowship Program aimed at companies at an earlier stage than the main program.
- In October 2015, Y Combinator introduced the YC Continuity Fund. The fund allows Y Combinator to make pro rata investments in their alumni companies with valuations under $300 million. Y Combinator will also consider leading or participating in later stage growth financing rounds for YC companies.
- Nonprofit research lab YC Research was announced in October 2015. Researchers are paid as full-time employees and can receive equity in Y Combinator. OpenAI was the first project undertaken by YC Research, and in January 2016 a second study on basic income was also announced. Another project is research on new cities. Australian quantum physicist Michael Nielsen is a research fellow at YC Research since 2017.
- In October 2015, YC introduced YC Research to fund long-term fundamental research. YC President Sam Altman donated $10m.
- During 2017–2019, YC launched Startup School, the Series A program, the YC Growth program, Work at a Startup, and YC China.
- In March 2019, it was reported that Y Combinator was moving headquarters to San Francisco.
As of late 2021, Y Combinator had invested in >3,000 companies, most of which are for-profit. Non-profit organizations can also participate in the main YC program. Few non-profits have been accepted in the last years, among them Watsi, Women Who Code, New Story (charity), SIRUM (organization), Zidisha, 80,000 Hours, and Our World in Data.
In 2010, Kirsty Nathoo joined as an accountant and became CFO in 2012.
In February 2014, Sam Altman became president of Y Combinator. Y Combinator also announced a Board of Overseers: Brian Chesky, Adora Cheung, Patrick Collison, Drew Houston, Jessica Livingston, David Rusenko, Emmett Shear, and Sam Altman.
Ali Rowghani is listed on the YC website as the managing partner of YC Continuity.
Y Combinator has been blamed for its encouragement of the ageism culture in Silicon Valley. Paul Graham said in 2005 that people over 38 lacked the energy to launch startups. It was also at a Y Combinator event, the 2007 Startup School, that Mark Zuckerberg said, "Young people are just smarter". Research on this issue published by Harvard Business Review found these views to be misguided, as the average age of a successful startup founder was found to be 45 years old.
The Human Advancement Research Community (HARC) project was set up with the "mission to ensure human wisdom exceeds human power". The project was inspired by a conversation between Sam Altman and Alan Kay. Its projects include modelling, visualizing and teaching software, as well as programming languages. Members include Alan Kay and Bret Victor. Other people who have worked for HARC include Vi Hart. Patrick Scaglia was chair of HARC and was listed as an advisor in 2017.
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