Y Combinator

Source: Wikipedia, the free encyclopedia.
(Redirected from Y Combinator (company))

Y Combinator Management, LLC
Company typePrivate
IndustryStartup accelerator
FoundedMarch 2005; 19 years ago (2005-03)
FoundersPaul Graham, Jessica Livingston, Robert Tappan Morris, Trevor Blackwell
Headquarters,
United States
Number of locations
2 offices (2014)
Key people
Garry Tan (CEO)
Michael Seibel
Jared Friedman
ProductsVenture capital, investments
Websiteycombinator.com

Y Combinator Management, LLC (YC) is an American technology startup accelerator and venture capital firm launched in March 2005[1] which has been used to launch more than 4,000 companies.[2] The accelerator program started in Boston and Mountain View, expanded to San Francisco in 2019, and was entirely online during the COVID-19 pandemic.[3] Companies started via Y Combinator include Airbnb, Coinbase, Cruise, DoorDash, Dropbox, Instacart, Reddit, Stripe, and Twitch.[4]

History

Founded in 2005 by Paul Graham, Jessica Livingston, Robert Tappan Morris, and Trevor Blackwell,[5] Y Combinator (YC) initiated operations with concurrent programs in Cambridge, Massachusetts, and Mountain View, California. However, operational complexities arising from managing two programs prompted a consolidation in January 2009, resulting in the closing of the Cambridge program and the centralization of activities in Silicon Valley.[6]

In 2009, Y Combinator secured a $2 million investment led by Sequoia Capital, enabling increased annual funding for around 60 companies.[7] Sequoia further supported YC in 2010 through an $8.25 million funding round, bolstering the organization's capability to accommodate a growing number of startups.[8] Concurrently, Kirsty Nathoo joined the team, initially as an accountant, and subsequently as the Chief Financial Officer (CFO) in 2012.[9] In 2011, Yuri Milner and SV Angel offered every Y Combinator company a $150,000 convertible note investment.[10] The amount put into each company was changed to $80,000 when Start Fund was renewed.[11]

Paul Graham talking about Prototype Day at Y Combinator Summer 2009

Advisory roles were assumed by Harj Taggar and Alexis Ohanian in 2010,[12] and Paul Buchheit and Harj Taggar were named partners in November.[13] Michael Seibel joined Y Combinator as a part-time partner in January 2013 before becoming a full-time partner in 2014.[14] In September 2013, Y Combinator began funding nonprofit organizations that were accepted into the program after testing the concept with Watsi.[15] Sam Altman took part in Y Combinator's inaugural cohort in 2005 as a founder.[16] In 2014, Paul Graham appointed him as President.[17] Altman introduced a revised equity offering of $150,000 for a 7% stake.[18] Collaborations with Transcriptic and Bolt improved support for biotech and hardware startups.[19][20][non-primary source needed]

Global outreach became evident in 2016 as YC partners embarked on visits to 11 countries (Nigeria, Denmark, Portugal, Sweden, Germany, Russia, Argentina, Chile, Mexico, Israel, and India) to engage with founders and learn about international startup communities.[21] That summer, Altman returned to Y Combinator as a founder and worked on OpenAI.[22] Leadership responsibilities were delegated to Ali Rowghani and Michael Seibel for YC Continuity and YC Core programs, respectively.[23] Startup School, introduced in 2017, provided startups with online courses and personalized coaching. More than 1500 startups graduated from the program in its first year.[24]

In 2018, Y Combinator announced a new batch of startup schools. 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.[25] In response to the ensuing outcry, Y Combinator's accepted all 15,000 companies involved in the incident.[26][27] The same year, Qi Lu, a former CEO of Bing and Baidu, briefly assumed the role of CEO for YC China.[28] In November, YC announced Lu's departure and their decision to not pursue a program in China.[29] YC China later morphed into MiraclePlus, an accelerator similar to YC, with Lu once again at the helm. Geoff Ralston succeeded Altman as Y Combinator's President in 2019.[30][31]

Adapting to the COVID-19 pandemic, Y Combinator conducted its summer 2020 batch remotely.[32] In January 2022, a revised standard deal of $500,000 was introduced, comprising $125,000 for a 7% equity stake and an additional $375,000 via an uncapped safe mechanism incorporating a Most Favored Nation (MFN) clause.[33] The summer of 2022 saw a deliberate reduction in the startup intake by 40%, from 414 companies to 250.

In January 2023, Garry Tan assumed the positions of president and CEO, succeeding Geoff Ralston.[34][35][36] Tan's leadership marked the discontinuation of the YC Continuity growth fund.[37] YC moved its headquarters from Mountain View to San Francisco in the spring of 2023.[38]

In March 2024, Seibel stepped down as managing director.[39]

Programs

Y Combinator interviews and selects two batches of companies per year. The companies receive a total of $500,000 in seed money as well as advice, and connections. The $500,000 in funding is made up of $125,000 on a post-money SAFE in return for 7% equity and $375,000 on an uncapped SAFE with a "most favored nation" ("MFN") provision (i.e.: "we get the same best terms you give anyone else in the next round").[40] Non-profits receive a $100,000 donation.[41] The program includes "office hours", where startup founders meet individually and participate in group meetings. Founders also participate in weekly meetups where guests from the Silicon Valley ecosystem (successful entrepreneurs, venture capitalists, etc.) speak to the founders.[citation needed]

Y Combinator's program is designed to teach founders how to market their product, refine their teams and business models, achieve product/market fit, and scale the startup into a high growth business, etc. The program ends with "Demo Day", where startups present their business and technology prototypes to potential investors.[42][non-primary source needed]

Y Combinator operates additional programs and a fund designed to support and invest in startups which have already graduated from the main accelerator program. The Series A Program, YC Post-A Program, and YC Growth Program are operated by the same team and focus on helping fast-growing YC startups, and startups raising their Series B funding of $20 million to $100 million.[43][44][non-primary source needed]

Y Combinator has introduced additional programs since 2015, including:

  • In July 2015, Y Combinator introduced the YC Fellowship Program, aimed at companies at an earlier stage than the main program.[45] The first batch of YC Fellowship included 32 companies that received an equity-free grant instead of an investment.[46] In January 2016, YC changed the program, with participating companies receiving $20k investment for a 1.5 percent equity stake. The equity stake is structured as a convertible security that converts into shares only if a company has an initial public offering (IPO), or a funding event or acquisition that values the company at $100 million or more.[47] The fellowship was discontinued in 2017.[48]
  • In October 2015, Y Combinator introduced the now-defunct YC Continuity Fund. The fund allowed Y Combinator to make pro rata investments in their alumni companies. The program was shut down, and staff were laid off in March 2023.[49]
  • Nonprofit research lab YC Research was announced in October 2015. Researchers are paid as full-time employees and can receive equity in Y Combinator.[50][51][52] OpenAI was the first project undertaken by YC Research, and in January 2016 a second study on basic income was also announced.[53] Another project is research on new cities.[54] Australian quantum physicist Michael Nielsen is a research fellow at YC Research since 2017.[55]
  • In October 2015, YC introduced YC Research to fund long-term fundamental research. Altman donated $10m.[50][non-primary source needed]
  • During 2017–2019, YC launched Startup School, the Series A program, the YC Growth program, Work at a Startup, and YC China.[56][non-primary source needed]
  • In March 2019, it was reported that Y Combinator was moving headquarters to San Francisco.[57]

As of late 2023, Y Combinator had invested in over 4,000 companies,[2] most of which are for-profit, holding a combined valuation of $600 billion.[58] Non-profit organizations can also participate in the main YC program.[59] Few non-profits have been accepted in the last years, among them Watsi, Women Who Code, New Story, SIRUM, Zidisha, 80,000 Hours, and Our World in Data.[60]

Open Research project

The Human Advancement Research Community (HARC) project was set up with the "mission to ensure human wisdom exceeds human power".[61][62] The project was inspired by a conversation between Sam Altman and Alan Kay.[63] Its projects include modelling, visualizing and teaching software, as well as programming languages. Members included Alan Kay, Bret Victor, and Vi Hart. Patrick Scaglia was chair of HARC and was listed as an advisor in 2017.[64][65] YC Research disaffiliated with Y Combinator and now operates as Open Research.[66][67]

See also

References

  1. ^ Jackson, Christopher (August 5, 2012). "Y Combinator's first batch: where are they now?". Archived from the original on November 18, 2017. Retrieved November 11, 2019.
  2. ^ a b "Y Combinator Companies List". Archived from the original on September 30, 2023. Retrieved November 11, 2019.
  3. ^ Patel, Nilay (June 8, 2021). "The next generation of startups is remote". The Verge. Archived from the original on July 7, 2021. Retrieved July 5, 2021.
  4. ^ "Y Combinator Top Companies List – 2019". Archived from the original on October 17, 2018. Retrieved November 11, 2019.
  5. ^ Graham, Paul (March 15, 2012). "How Y Combinator Started". Y Combinator. Archived from the original on July 17, 2014. Retrieved October 22, 2016.
  6. ^ Graham, Paul (January 2009). "California Year-Round". Y Combinator. Archived from the original on March 6, 2017. Retrieved October 22, 2016.
  7. ^ "Y Combinator Gets The Sequoia Capital Seal Of Approval". TechCrunch. May 16, 2009. Archived from the original on September 19, 2012. Retrieved February 10, 2011.
  8. ^ Rao, Leena (May 21, 2010). "Y Combinator Closes New $8.25 Million Fund, Sequoia Is Lead Investor". TechCrunch.com. Archived from the original on September 15, 2018. Retrieved June 22, 2016.
  9. ^ Rao, Leena (February 9, 2013). "Meet Kirsty Nathoo, Y Combinator's Secret Financial And Operational Weapon". techcrunch.com. TechCrunch. Archived from the original on November 3, 2019. Retrieved January 20, 2020.
  10. ^ Arrington, Michael (January 28, 2011). "Start Fund: Yuri Milner, SV Angel Offer EVERY New Y Combinator Startup $150k". TechCrunch. Archived from the original on February 11, 2014. Retrieved October 22, 2016.
  11. ^ Rao, Leena (November 26, 2012). "Y Combinator's YC VC Will Replace The Start Fund; Includes Yuri Milner, Andreessen Horowitz But Offers Less Money". TechCrunch. Archived from the original on October 24, 2016. Retrieved October 22, 2016.
  12. ^ Arrington, Michael (September 1, 2010). "Reddit Cofounder Alexis Ohanian To Join Y Combinator". TechCrunch. Archived from the original on October 22, 2012. Retrieved February 28, 2012.
  13. ^ Graham, Paul (November 12, 2010). "Y Combinator announces two new partners, Paul Buchheit and Harj Taggar". Y Combinator Posterous. Archived from the original on October 28, 2012. Retrieved February 28, 2012.
  14. ^ "Y Combinator hires first black partner to recruit more minorities". USA Today. December 3, 2014. Archived from the original on August 12, 2020. Retrieved August 29, 2020.
  15. ^ Yeung, Ken (September 6, 2013). "Y Combinator to Fund Non-Profit Startups with Charitable Donations". The Next Web. Archived from the original on October 6, 2014. Retrieved October 1, 2014.
  16. ^ "Y Combinator Companies". Y Combinator.
  17. ^ Graham, Paul (February 21, 2014). "Sam Altman for President". Y Combinator. Archived from the original on March 25, 2017. Retrieved October 22, 2016.
  18. ^ "Y Combinator's 'New Deal' for startups: More money, same 7% equity". VentureBeat. April 23, 2014. Archived from the original on November 29, 2016. Retrieved November 29, 2016.
  19. ^ Altman, Sam (December 8, 2014). "Transcriptic for YC biotech startups". Y Combinator. Archived from the original on October 18, 2016. Retrieved October 22, 2016.
  20. ^ Altman, Sam (February 5, 2014). "YC for Hardware". Y Combinator. Archived from the original on February 7, 2015. Retrieved October 22, 2016.
  21. ^ Modgil, Shweta (August 16, 2016). "YCombinator Is Coming To India This September; Here's Why You Should Be Excited". Inc 42. Archived from the original on August 17, 2016. Retrieved September 10, 2016.
  22. ^ "Y Combinator Companies - OpenAI". Y Combinator.
  23. ^ Schubarth, Cromwell (September 13, 2016). "Y Combinator names new leaders as it changes shape again". Silicon Valley Business Journal. Archived from the original on October 11, 2016. Retrieved October 18, 2016.
  24. ^ Constine, Josh (June 16, 2017). "1500+ startups graduate Y Combinator's first online Startup School". TechCrunch. Archived from the original on August 9, 2020. Retrieved April 13, 2020.
  25. ^ "Y Combinator accepts 15,000 startups into its online school after software glitch causes confusion". VentureBeat. August 21, 2018. Archived from the original on August 22, 2018. Retrieved August 22, 2018.
  26. ^ "Startup School: Every Company that Applied is Now Accepted". Y Combinator Blog. August 20, 2018. Archived from the original on June 17, 2020. Retrieved April 16, 2020.
  27. ^ Schleifer, Theodore (February 27, 2019). "Y Combinator accidentally let 15,000 people into an exclusive program". Vox. Retrieved December 26, 2023.
  28. ^ "Y Combinator is launching a startup program in China". TechCrunch. August 15, 2018. Retrieved October 27, 2019.
  29. ^ "An update on YC China". Y Combinator. Archived from the original on November 21, 2019. Retrieved October 27, 2019.
  30. ^ Altman, Sam. "Geoff Ralston for President". Y Combinator. Archived from the original on June 17, 2019. Retrieved June 17, 2019.
  31. ^ "Y Combinator president Sam Altman is stepping down amid a series of changes at the accelerator". TechCrunch. March 8, 2019. Retrieved September 9, 2020.
  32. ^ Seibel, Michael (April 20, 2020). "YC S20 Remote Batch". Y Combinator. Archived from the original on April 21, 2020. Retrieved April 21, 2020.
  33. ^ Mascarenhas, Natasha (August 2, 2022). "Y Combinator narrows current cohort size by 40%, citing downturn and funding environment". TechCrunch. Archived from the original on September 15, 2022. Retrieved September 15, 2022.
  34. ^ "Welcome Home, Garry Tan". Y Combinator. Retrieved July 19, 2023.
  35. ^ "Y Combinator Names Venture Capitalist Garry Tan As Its Next President". Forbes. Archived from the original on February 25, 2023. Retrieved February 24, 2023.
  36. ^ Mascarenhas, Natasha (August 29, 2022). "Garry Tan's return is a full circle moment for Y Combinator". TechCrunch. Retrieved July 19, 2023.
  37. ^ "Y Combinator to End Late-Stage Startup Fund, Lays Off Staff". The Information. Retrieved August 3, 2023.
  38. ^ Mathews, Jessica (January 12, 2024). "Garry Tan says founders 'have to be in San Francisco' as Y Combinator ditches Mountain View headquarters for the big city". Yahoo! Finance. Archived from the original on January 13, 2024 – via Fortune.
  39. ^ Levy, Steven (March 15, 2024). "Y Combinator's Chief Startup Whisperer Is Demoting Himself". [[Wired (magazine)|]]. Retrieved March 17, 2024.
  40. ^ "The Y Combinator Standard Deal". Y Combinator. Retrieved July 10, 2023.
  41. ^ Nathoo, Kirsty (January 2022). "The New Deal". Y Combinator. Archived from the original on January 16, 2022. Retrieved January 16, 2022.
  42. ^ Graham, Paul (June 2014). "What happens at YC". Y Combinator. Archived from the original on March 3, 2020. Retrieved May 8, 2013.
  43. ^ "Y Combinator Continuity". Archived from the original on October 18, 2021. Retrieved October 18, 2021.
  44. ^ "YC Growth Program". Archived from the original on October 18, 2021. Retrieved October 18, 2021.
  45. ^ Loizos, Connie (July 20, 2015). "Y Combinator Just Introduced a New Program to Reach Up to "1,000" Companies Per Year". TechCrunch. Archived from the original on July 21, 2015. Retrieved July 21, 2015.
  46. ^ "Y Combinator". January 14, 2021. Archived from the original on October 17, 2018. Retrieved January 14, 2021.
  47. ^ "Fellowship V2". Y Combinator Posthaven. Archived from the original on January 29, 2016. Retrieved January 27, 2016.
  48. ^ "With a new CEO, Y Combinator will wind down fellowships and start a MOOC". TechCrunch. September 13, 2016. Retrieved September 9, 2020.
  49. ^ "Y Combinator to End Late-Stage Startup Fund, Lays Off Staff". The Information. Retrieved August 3, 2023.
  50. ^ a b Altman, Sam (October 7, 2015). "YC Research". Y Combinator Posthaven. Archived from the original on October 29, 2015. Retrieved October 22, 2016.
  51. ^ Yeung, Ken (October 8, 2015). "Sam Altman commits $10M to start Y Combinator research lab". VentureBeat. Archived from the original on June 11, 2017. Retrieved September 18, 2017.
  52. ^ Newton, Casey (October 7, 2015). "Y Combinator is launching its own in-house moonshot group". The Verge. Archived from the original on November 7, 2017. Retrieved September 18, 2017.
  53. ^ "YCR is a non-profit research lab". Y Combinator Research. Archived from the original on June 11, 2016. Retrieved October 22, 2016.
  54. ^ Cheung, Adora. "New Cities". Archived from the original on November 16, 2017. Retrieved November 26, 2017.
  55. ^ "Michael Nielsen". michaelnielsen.org. Archived from the original on April 9, 2019. Retrieved March 27, 2019.
  56. ^ Combinator, Y. "Updates from YC". Y Combinator. Archived from the original on March 10, 2019. Retrieved March 11, 2019.
  57. ^ Kawamoto, Dawn (March 11, 2019). "Venture capital powerhouse is latest Silicon Valley firm to open San Francisco office". San Francisco Business Times. Archived from the original on March 21, 2019. Retrieved March 16, 2019.
  58. ^ "Y Combinator". Y Combinator.
  59. ^ Graham, Paul (September 2013). "YC Will Now Fund Nonprofits Too". Y Combinator. Archived from the original on September 18, 2018. Retrieved October 18, 2016.
  60. ^ "Here are the 85+ startups that launched at YC's W19 Demo Day 1". TechCrunch. March 19, 2019. Retrieved July 9, 2019.
  61. ^ Research, Y Combinator. "HARC". harc.ycr.org. Archived from the original on December 1, 2017. Retrieved November 26, 2017.
  62. ^ "Y Combinator launches new 'Human Advancement Research Community'". May 11, 2016. Archived from the original on December 1, 2017. Retrieved November 26, 2017.
  63. ^ "Y Combinator Research launches Human Advancement Research Community, Alan Kay participating". May 11, 2016. Archived from the original on December 1, 2017. Retrieved November 26, 2017.
  64. ^ Altman, Sam. "HARC". Archived from the original on October 12, 2017. Retrieved November 26, 2017.
  65. ^ "Members". November 26, 2017. Archived from the original on November 26, 2017.
  66. ^ "YC Research, now OpenResearch, and its portfolio of research projects are no longer affiliated with Y Combinator". ycr.org. Archived from the original on June 11, 2016. Retrieved March 6, 2023.
  67. ^ "OpenResearch". openresearchlab.org. Archived from the original on May 19, 2022. Retrieved May 19, 2022.

External links