[Apocryphon]

1. "You only have to be right once"... out of how many times? 1/6? 1/10? Much worse? This caveat is nothing but an ad for lottery tickets.

2. Sure, startups are a fine place to hone your talents, show your worth, and network. Same as any other type of workplace. Who's to say you wouldn't have met someone else at a big company who could've gotten you into Square?

3. For every serial entrepreneur who truly has a knack for it and truly learned along the way, there are those who are persisting in error. You're combining your first and second caveats here, describing the possibility of networking one's way into working for a quality experienced founder who will be your lottery ticket.

Nothing wrong with startups, but this is just another set of hoary old truisms more optimistic than the previous one.

[hn_neverguess]

> out of how many times?

Let's do the math. YC has had 378 exits out of 4314 investments [0], so roughly 9% so far. Most investments have been made recently enough that those companies are still baking, so let's double that number to 18%.

The only other number of you need is how likely you are to get into YC. Their overall acceptance rate is 1.75% per application[1], so if you apply three times with the same startup, you get to 5.25%. That figure includes literally everyone and their grandmother, so let's assume you're deciding between a startup and FAANG. Well, FAANG's acceptance in late stages of interviews is around 15% [2], so your YC acceptance chances are around 33%.

Combine 33% and 18%, and you get 6% per lifecycle of a startup. If you try that with four startups, you're at 24%.

Is 24% a good deal? Well, it depends on the upside and the opportunity cost. Let's assume it took you 16 years to build 4 failed startups. In that time period, you could have earned around $5m at FAANG ($300k/year). Of course, things could have also gone wrong (bad manager, your screwed up, layoffs), so let's peg that chance at 80%, which gives the opportunity cost of $4m.

The average YC exit is $24m (not taking into account the whales, which ballooned the overall YC portfolio to over $300B) - the $24m seems like a pretty conservative take [3]. That yields almost $6m upside, not including dilution. Hard to guess what the average dilution is, but I bet you it's higher than 33%, which would have been the breakeven point. Darn it, startups suck! :)

[0] https://www.cbinsights.com/investor/y-combinator

[1] https://www.ycombinator.com/investors

[2] https://www.teamblind.com/post/Whats-fangs-interview-selecti...

[3] https://www.shawnngtq.com/projects/y-combinator-startups-ana....

[Apocryphon]

We might be posting on YC's site, but there are a whole lotta startups beyond YC funded ones. For all of this work, this math relies upon an incomplete data set.

[scarface74]

But you have to include dilution. You’re speaking as a founder - not an employee.

If I join any of the BigTech companies (FAANG - Netflix + Microsoft), as a mid level developer, I’m guaranteed to get a $1 million+ four year offer and I don’t have to wait on an exit and pray for a successful exit. I can sell my RSUs at every vesting event. The average startup takes 7 years to exit. I would have also been hypothetically missing out on one of the greatest bull markers and seen my earlier grants more than double over the last five years.

I left out Netflix because even before the stock tanked, it should have never been grouped with the 1 trillion+ BigTech companies.

[grog454]

From [2], is this post really your source?

> Capital One / Eng NewHere1

> 23 Comments

> How many people interview vs get the job ?

>

> My guess /estimates (avg company wide)

> ...

Or some other post behind the login wall?

A bad reference is probably worse than no reference.