[SemanticFog]

If YC holds common shares, then you need to adjust the expected value down quite a bit. On any exit that isn't a huge win, non-employee common shareholders are by far the most likely to get short end. The expected value is probably 10-50% of the fully diluted headline value of a VC deal.

But YC is clearly going to do spectacularly well. They deserve big congrats for what they've accomplished.

[myoung8]

This isn't generally the case anymore--funding rounds these days tend to assign a 1X liquidation preference to both common and preferred shares, so assuming that a company gets acquired for more than its valuation, you shouldn't need to adjust EV down.

[SemanticFog]

1x is still 1x -- if you don't get over it, the common shareholders don't get paid. In a pool as big as YC's there will be plenty of examples.

[usaar333]

True, but there's still a very good chance of being acquired for less - which means you have to adjust the EV down.

[pmjordan]

Except all the maths here has only accounted for the top 10%. Those top 10% are fairly unlikely to be sold off at scrap value.

[SemanticFog]

You'd be surprised. The ones that raise the most money also have the hardest time getting over the preferred total. The purchaser will take care of the employees it wants, but other common shareholders often end up out of luck.