Y-Combinator Startups Analysis

24th Oct 2017

Project background

Y Combinator (YC) is one of the top accelerators in the world.

I am interested to find out the secret to build a successful world-class startup. The best way to do that is to analyze these YC alumni startups from an investor's perspective.

I look through 1317 YC startups over 6000+ minutes. Some of the questions that I have while looking at these startups are:

  • Is this business idea interesting/unique?
  • How big is the market and who are the customers?
  • How strong is the team?

The 1317 YC startups are scrapped from Snappr, for batch S05 to W17. I noticed there are some missing startups. But I can live with that:wink:. I've updated the fundings using CrunchBase's data when I was looking through these startups.

Funding categories of YC startups

I have created categories for the amount of money raised to classify the startups. The standard unit for this article will be million (USD).

Group startups by their funding categories
Group startups by their funding categories table

Observations:

  • Around 30% of the YC startups reach Series A
  • To be in the top 3%, the startups need to raise over $50 million

YC startups statuses

There are in total 3 possible statuses: live, dead:skull_crossbones: or exited (acquired)

Group startups by their status
Group startups by their status table

Observations:

  • Death rate: 18%
  • Acquisition rate: 15%
  • Total funds raised by YC startups: $23.34 billion
  • YC net: -(1317*0.12) + (0.07*4874.115) = $183 million
  • Average exit: $24 million
  • Millionaires: 203 x n co-founders, based on the average exit, with 30% equity = $7 million
  • It is important to know that average may not be the most accurate picture, but it's the easiest way to show high-level information

YC startups industries

Keywords used by these startups

It is quite surprising to see that there are only 107 keywords used by 1317 startups. It will be lesser than 107 words if you remove meaningless words and verbs.

Top YC startups countries

I listed the top 10 countries of YC startups. The remaining countries have too few YC startups.

YC startups' countries
YC startups' countries table

Observations:

  • Singapore:flag_sg: is doing great, for a country with only 5.6+ million population, of which 3.9+ million are citizens and pr
  • They are: Tech in Asia, Xfers, Saleswhale & AlemHealth

YC startups batches

YC batches statuses
YC batches fundings

Observations

  • I noticed that every 5 batches, the number of fundings will spike. Batch: 07S, 09W, 12S, 14W

Acquired YC startups fundings

Acquired YC startups' fundings
Acquired YC startups' fundings table

Observations:

  • Most acquisitions happened between seed and series B round
  • Based on the acquired stage, it seems that most of the founders did not become a millionaire
  • This proves that the 203 x n millionaires that I mentioned earlier are wrong

Acquired YC startups without funding

I noticed these acquired startups do not show the funds they raised. I think there is a high probability that the amount raised is not high, but there might be outliers. Please do your own research.

['Hivy', 'Unwind Me', 'Eventjoy', 'Teleborder', 'RoverRide', 'Crohnology', 'Easel', 'Kippt', 'Knowmia', 'Statwing', 'VoiceGem', 'Carsabi', 'HackPad', 'Hipmob', 'Midnox', 'Pixelapse', 'Socialcam', 'Clutch.io', 'GlassMap', 'Leaky', 'Pagelever', 'Rentobo', 'Snapjoy', 'Stypi', 'TapEngage', 'Zigfu', 'Sendoid', 'TalkBin', 'FanVibe', 'Gantto', 'GazeHawk', 'PadMapper', 'Simperium', 'Cardpool', 'Crocodoc', 'Data Marketplace', 'Echodio', 'Lingt', 'reMail', 'FathomDB', 'Omnisio', 'Clickpass', 'Project Wedding', 'Snipshot', 'Memamp', 'Parakey', 'TextPayMe']

Acquired YC startups locations

Acquired startups' locations
Acquired startups' countries

Observations:

  • Being present in the USA:flag_us: is important if you wish to sell your startup
  • California, specifically Silicon Valley, is the place to sell your startup
  • Since most of these startups are located in the USA, there will be biased towards the USA

Dead YC startups fundings

Dead YC startups' fundings
Dead YC startups' fundings table

Observations:

  • Most startups died before/during Series A
  • The higher the funds, the chance of dying decreases. Or perhaps, it might be prolonging death

Interesting YC startups

YC startups' that I am interested and will invest in
Interesting YC startups' batch
Interesting YC startups' batch total funding

Observations:

  • I will invest in 16% of these startups. These startups have average funding of $40 million
  • Since the sum of all startups I'm not interested in is $15 billion, it means that I am not interested in some of the biggest YC startups
  • In general, I prefer to invest in early-stage startups due to lower valuations and higher potential returns
  • The number of YC startups increase over the years
  • Despite a bigger batch size, the quality of the startups don't drop, based on my inspection
  • Interesting batches: 11S, 17S

Final thoughts

From the statistics, you see that the probability of becoming rich by starting a company is low. However, extreme result requires extreme effort and risk.