[lawstudent2]

This is also rather misleading - because 300 have been shut down, 904 have been funded, which includes 107 in the last batch, which can be discounted entirely from these stats. This gives us 300/797 have shut down, or a percentage of about 38%.

What I'd like to know is the value, at exit, of the companies that have exited or gone public. Because I can guarantee you that the "valuation" of $65B+ is a totally meaningless number. This includes every single company that had a huge, unsustainable up round which will almost certainly be devalued based on future financings or exits.

[pc]

> Because I can guarantee you that the "valuation" of $65B+ is a totally meaningless number. This includes every single company that had a huge, unsustainable up round which will almost certainly be devalued based on future financings or exits.

"Meaningless" is hyperbolic. How much would you pay for a share of Airbnb? More than nothing, I assume. I think one can conclude something from consummated, informed responses to this question.

[lawstudent2]

No - I stand by that as a literal use.

Does 65B represent the actual money value that people will pay for the shares of 100% of the ~600 currently existing YC companies?

Does it tell us the average value? The mean? Standard deviation? Quintile distributions? P/E? Is that number just based on valuations from funding rounds? Projections?

It is literally meaningless. It is not verifiable. The standards that are used to calculate it are not explained. There is no explanation to how it relates to the companies in the portfolio.

I'm a bear by nature. I think that the current batch of SaaS unicorns have an unsustainable valuation, and I think this unverified number feeds into that.

[austenallred]

Valuation means the price that investors or acquirers were willing to pay. That someone was willing to pay that is a verifiable fact.

What the returns will be is an unknown, of course. But to say that is "meaningless" is either naive or a misuse of the word. Stock prices and market caps are decided the same way.

[gress]

Public stock prices are decided by supply-demand balance. In no way does this valuation resemble that mechanism.

[austenallred]

Public stock prices are the last price someone was willing to buy that stock at.

Private stock prices are the last price someone was willing to buy that stock at.

It is slightly less simple, because you may give a discount for advice, but private stock prices are definitely reliant upon supply and demand. If one investor wants to set your valuation at $1B and another at $100m, you go with the one who offered a $1B valuation. There is occasionally a discount for advice/connections, but the mechanism that the highest bidder wins is generally the same. Private market stocks are by no means exempt from economics or supply and demand.

[gress]

I don't know if you are making a disingenuous argument or you just don't know about liquidity, or indeed the effects of sample size on estimating a changing value, but what you've said here has no relationship with reality.

[staunch]

The problem is using the words "valuation" and "worth" interchangeably. Just because someone pays $50 million for 5% of startup doesn't make it magically worth $1 billion. No one would actually pay anything close to $1 billion for the whole thing, hence it is not worth anything close to $1 billion. That's just the implied valuation.

[T2_t2]

AirBnB: $24 Billion. DropBox: $10 Billion. Zenefits: $4.5 Billion Stripe: $3.5 Billion. Instacart: $2 Billion Twitch: $1 Billion

Total: $45 Billion.

Source: http://graphics.wsj.com/billion-dollar-club/

So they value the rest of the portfolio at $20 billion. Does that seem reasonable?

[loumf]

I believe that they just added up acquisition amounts and the last funding rounds of each company. I don't believe that number represents what "they value" the portfolio at beyond that.

[SandersAK]

Happy to buy any shares you have in any of the YC unicorns.

[austenallred]

Especially for $0

[sskates]

You can calculate the mean yourself by taking total valuation divided by number of companies. I'll do it for you:

$65 billion / (940 companies) = $69 million / company

[aj_icracked]

Who else wants PC and Lawstudent2 to continue this debate? :) I'll bring popcorn.

[7Figures2Commas]

I think the point you're wanting/trying to make is that private market valuations are ridiculously high. But that's not YC's fault. It should enjoy this while it lasts, and hope that as many of its investments as possible get to liquidity before the music stops.

A more interesting observation is that two companies account for over half of the $65 billion. Airbnb's most recent valuation was reportedly $25 billion, and Dropbox's was reportedly $10 billion. These companies are not likely to go away overnight a la Homejoy, but their valuations are going to be hard to sustain. Dropbox in particular would be a very tough sell to the public markets at its private market valuation given its comp[1].

Making analysis even more difficult is that today's big money, late-stage deals have lots of strings attached, so these valuations are hard to assess without knowing all of the details.

Final comment: despite the constant suggestions to the contrary, YC's portfolio appears to live in the very same power law reality as most early-stage investment portfolios in Silicon Valley.

[1] https://www.cbinsights.com/blog/dropbox-valuation-bubble/

[csomar]

>> Although these are very imperfect indicators of success, here they are.

There you got your response at the beginning of the post. It seems that you are attacking for the sake of attacking? Sam is providing these data because people asked for them.