Y Combinator Startups Analysis

Project Overview

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 1,317 YC startups over 6,000+ 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 1,317 YC startups are scrapped from batch S05 to W17. I noticed there are some missing startups. But I can live with that. 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).

Funding categories plot — Group startups by their funding categories

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 or exited (acquired)

Status plot — Group startups by their status

Observations:

Death rate: 18%
Acquisition rate: 15%
Total funds raised by YC startups: $23.34 billion
YC net: -(1,317 × 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

Sector — Keywords used by these startups

It is quite surprising to see that there are only 107 keywords used by 1,317 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.

Funding countries plot — YC startups countries

Funding countries — YC startups countries table

Observations:

Singapore 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

Observations

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

Acquired YC startups fundings

Exit fundings plot — Acquired YC startups' fundings

Exit 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

Exit locations — Acquired startups' locations

Exit countries — Acquired startups' countries

Observations:

Being present in the USA 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 fundings plot — Dead YC startups' fundings

Dead 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

Interested — YC startups' that I am interested and will invest in

Interested count — Interesting YC startups' batch

Interested sum — 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.

Shawn Ng