Y Combinator

Y Combinator (YC) is an American seed money startup accelerator launched in March 2005.[1] It has been used to launch over 2,000 companies,[2] including Stripe, Airbnb, Cruise Automation, DoorDash, Coinbase, Instacart, Dropbox, Twitch, and Reddit.[3] The combined valuation of the top YC companies was over US$300 billion as of January 2021.[4] The company's accelerator program is held in Mountain View, California.

Y Combinator was founded in 2005 by Paul Graham, Jessica Livingston, Trevor Blackwell, and Robert Tappan Morris.[5]

From 2005 to 2008, one program was held in Cambridge, Massachusetts, and one was held in Mountain View, California. As Y Combinator grew to 40 investments per year, running two programs became too much. In January 2009, Y Combinator announced that the Cambridge program would be closed and all future programs would take place in Silicon Valley.[6]

In 2009, Sequoia Capital led the $2 million investment round into an entity of Y Combinator to enable them to invest in approximately 60 companies a year.[7] The following year, Sequoia led an $8.25 million funding round for Y Combinator to further increase the number of startups the company could fund.[8]

Then, in 2011, Yuri Milner and SV Angel offered every Y Combinator company a $150,000 convertible note investment.[9] The amount put into each company was changed to $80,000 when Start Fund was renewed.[10]

In September 2013, Paul Graham announced Y Combinator would fund nonprofit organizations that were accepted into the program after having tested the concept with Watsi (while continuing to fund mostly for-profit startups).[11]

In 2014, founder Paul Graham announced he was stepping down and that Sam Altman would take over as president of Y Combinator.[12] That same year, Altman announced "The New Deal" for YC startups, which offers $150,000 for 7% equity.[13][14]

Late in 2014, Sam Altman announced a partnership with Transcriptic to provide increased support for Y Combinator's growing community of biotech companies.[15] Then in 2015, he announced a partnership with Bolt and increased support for hardware companies.[16]

The YC Fellowship Program was announced in July 2015, with the goal of funding companies at the idea or prototype stage.[17] The first batch of YC Fellowship included 32 companies that received an equity-free grant instead of an investment.[4]

In January 2016, Y Combinator announced version 2 of the Fellowship program, with participating companies receiving $20k investment for a 1.5% equity stake.[citation needed] The equity stake is structured as a convertible security that only converts into shares if a company has an initial public offering (IPO), or a funding event or acquisition that values the company at $100m or more.[18] The YC Fellowship was short-lived. In September 2016, then CEO Sam Altman announced that the fellowship will be discontinued.[19]

On 11 August 2016, YC announced that YC partners would visit 11 countries to meet with founders and learn more about how they could be helpful to international startup communities. Those 11 countries were Nigeria, Denmark, Portugal, Sweden, Germany, Russia, Argentina, Chile, Mexico, Israel, and India.[20][21]

In September 2016, Y Combinator announced that then CEO Altman would be leaving Y Combinator and moving the role of president of YC Group, which includes Y Combinator.[citation needed] Former Twitter chief financial officer and chief operating officer Ali Rowghani was then in charge of the YC Continuity Fund when it started and continues to act as CEO of YC Continuity. Michael Seibel, who co-founded Justin.tv, is the new CEO of YC Core, the program that Paul Buchheit has run since 2016.[22]

In 2017, Y Combinator announced Startup School, an online course that released public videos and also coached individual startups on a larger scale to replace the fellowship. 1584 startups graduated the program in its first year.[23]

In 2018, Y Combinator announced a new batch of startup school. After a software glitch, all 15,000 startups that applied to the program were accepted, only to learn a few hours later that they had been rejected.[24] But the ensuing outcry led Y Combinator to change course again and decided over an official blog to finally accept all those 15000 companies.[25] Now, every company is accepted to join YC Startup School without any restrictions.

On 20 May 2019, Sam Altman announced he was stepping down and that Geoff Ralston would take over as President of Y Combinator.[26][27]

On 20 April 2020, Michael Seibel announced that the summer 2020 ("S20") will be fully remote, due to the COVID-19 pandemic. This includes interviews for the batch, office hours, evening talks, and meetups throughout the batch.[28]

Y Combinator interviews and selects two or more batches of companies per year. The companies receive seed money, advice, and connections in exchange for 7% equity of the company.[29] The program includes "office hours", where startup founders meet individually and group meetings. Founders also participate in weekly dinners where guests from the Silicon Valley ecosystem (successful entrepreneurs, venture capitalists, etc.) speak to the founders.

Y Combinator's motto is "Make Something People Want."[30] The program teaches founders to market their product, team and market, refining their business model, achieving product/market fit, and scaling the startup into a high growth business, etc. The program ends with Demo Day, where startups present their business and sometimes technology to potential investors.[31]

Y Combinator has introduced additional programs since 2015, including:

As of late 2019, Y Combinator had invested in >2,000 companies,[2] most of which are for-profit. Non-profit organizations can also participate in the main YC program.[41] Few non-profits have been accepted in the last years, among them Watsi, Women Who Code, New Story (charity), SIRUM (organization), Zidisha, 80,000 Hours, and Our World in Data.[42]

Y Combinator was founded in March 2005 by Paul Graham, Jessica Livingston, Robert Morris and Trevor Blackwell.

In 2010, Kirsty Nathoo joined as an accountant and became CFO in 2012.[43]

In early 2010, Harj Taggar joined as an advisor. In September 2010, Alexis Ohanian joined.[44] In November 2010, Paul Buchheit and Harj Taggar were named partners.[45] In 2015, Taggar left YC.[46]

In January 2011, Garry Tan joined YC, first as designer-in-residence and later as partner.[47][48] He left YC in November 2015.[48]

In February 2014, Sam Altman became president of Y Combinator.[12] Y Combinator also announced a Board of Overseers: Brian Chesky, Adora Cheung, Patrick Collison, Drew Houston, Jessica Livingston, David Rusenko, Emmett Shear, and Sam Altman.

Michael Seibel joined Y Combinator as part-time partner in January 2013 and later became a full-time Partner in 2014.[50]

Ali Rowghani is listed on the YC website as the managing partner of YC Continuity.[50]

The company includes visiting partners Kevin Hale, Solomon Hykes, Holly Liu, Diego Rey, Aaron Epstein.[50][51]

In 2018, Y Combinator announced that Lu Qi, a former CEO of Baidu and Bing, would join the company as CEO of YC China.[52] Y Combinator announced that Lu left YC in November 2019.[53]

In March 2019, Y Combinator announced its president Sam Altman would be transitioning into a Chairman position to focus more on OpenAI and Geoff Ralston would be the new president.[39][54]

Y Combinator has been blamed for its encouragement of the ageism culture in Silicon Valley. Paul Graham said in 2005 that people over 38 lacked the energy to launch startups.[55] It was also at a Y Combinator event, the 2007 Startup School, that Mark Zuckerberg said, "Young people are just smarter".[56]

The Human Advancement Research Community (HARC) project was set up with the "mission to ensure human wisdom exceeds human power".[57][58] The project was inspired by a conversation between Sam Altman and Alan Kay.[59] Its projects include modelling, visualizing and teaching software, as well as programming languages. Members include Alan Kay and Bret Victor. Other people who have worked for HARC include Vi Hart. Patrick Scaglia was chair of HARC and was listed as an advisor in 2017.[60][61]