[pedalpete]

Though the big hit makes the major returns, doesn't the one small hit per session cover the operating expenses? (Reddit, Zenter, 280North, etc. etc.)

I think this is what the original post might be missing. The top incubator(s) can patiently wait for the big hits, as long as they've got 1-in-20(ish) small hits to keep them in the black.

[pg]

You can't count on that, because acquisitions are so unpredictable. In bad times they dry up entirely. YC was not in the black till December 2010, more than 5 years after we started.

[abiekatz]

Sounds like it was Heroku's $212 million sale to Salesforce that pushed YC into the black. Though, I imagine if you also include on paper gains, you were in the black much earlier.

[pg]

Actually it was either Zecter or Cloudkick. December was a big month.