* How many companies are founded by people who are not native english speaker? I mean, an entire non english speaker team, e.g., all of them were born in Russia or China and came to US in a "late" age (e.g., after 22), instead of Canada, UK etc.
It would be more interesting if we can see a YC-funded company that is founded by a single founder who is not a native English speaker and came to US after 22 and he/she is now over 35 :) This somehow makes the game harder
to play, but it would be challenging and fun and inspiring :)
The stereotype of a YC company is still multi-founder + at least one native english speaker + young. It will be certainly an outlier of outlier if there's ever a YC company that sets an inspiring example that single founder + non native english speaker + "old" can be accepted to YC and can succeed. Or we may need a YC-clone that is started in non-english-speaking countries or is started by a first-generation non-native-english-speaker immigrant in US.
Interesting stats. I don't get this section though:
UNDERREPRESENTED FOUNDERS
S17 Female founders: 35 (12% of all S17 founders)
S17 Applicants who were female: 14%
S17 Companies with a female founder: 27 (21% of the batch)
S17 Applications with a female founder: 22%
S17 Black founders: 14 (4.76% of S17 founders)
S17 Companies with a Black/Af-Am founder: 8 (6.25% of the batch)
S17 Hispanic/Latinx founders: 13 (4.42% of S17 founders)
S17 Companies with a Hispanic/Latinx founder: 7 (5.47% of the batch)
For females the percentage that were accepted is pretty close to the percentage that applied (21% vs 22%). So it seems like it would represent the applicant set.
Couple questions come to mind:
* For the black and hispanic stats, what were the percentage of the total applicants?
* Does the acceptance rate align with the application rate?
* Are the "% Applications with a ..." based on those that arrived at the office for an interview or total number of submissions?
* Are the stats self reported and if so optional or mandatory, or does someone at YC look at people to bucketize them?
...for this specific batch. Is parent questioning if this is historically the case or suggesting this is a move by YC at gender diversity? Just curious.
This is an excellent question. If I were running the applications I might have done the same (ask gender but not race/ethnicity), because gender just feels more generally okay to ask. But if the purpose of asking is for nothing more than stats recording, then why not ask ethnicity as well?
I think it lies in that people fear being biased against for reporting their ethnicity, either via affirmative action (white/asian) or racism (everyone else).
> I think it lies in that people fear being biased against for reporting their ethnicity, either via affirmative action (white/asian) or racism (everyone else).
Hm, two flaws about that dichotomy:
1) Many people that aren't white or asian also feel that affirmative action is a bias against their actual ability to contribute to society. For example, not everyone would see getting into YC as a monumental achievement, but even if they did the idea that it would be belittled because of a perception that their skin tone filled a quote is the same being biased against.
2) Many people call this racism as well. In this context, it would primarily be a reference to an institutionalized circumstance.
Underrepresented might not mean underpresented in YC, but underpresented in the industry. In which case there is more to consider than just the applicant set.
Another thing I've been curious about is how many of the founders had student loans when they started the company. I'd bet that student loans hold a lot of people back. I just paid mine off last year.
Student loans and health factors (specifically complications around health insurance or existing healthcare costs). Health considerations can be a massive issue when trying to do a start-up.
At 30-40 years old (with the average age around 30, I imagine there are plenty of candidates between 30-40), some small percentage of people are likely to be running into their first health problems or concerns.
Financially speaking, the only thing more ridiculous than the cost of education, is the cost of healthcare. If you need health insurance to cover a prescription that costs a thousand dollars per month, you're naturally going to have serious concerns about leaving the job that provides that insurance.
If you have a need for a prescription with costs in that range, the prescription itself is likely a minimal cost in the whole scheme of healthcare costs you have.
Specialists usually charge significantly more than primary care physicians and an unforseen trip to the ER can easily cost $20k. It's not as simple as working an extra month or two.
The risks of not having insurance are utterly terrible financial handcuffs. I'm just starting down the path of cancer treatments, the coverages (or lack thereof) and costs are eye-opening, and scary.
I'm pretty sure YC doesn't have any trouble getting companies to apply. Perhaps their biggest problem is just dealing with the shear volume of applications they already get.
In the US, you can get COBRA coverage to continue on your employer's group plan for 18 months. You have to pay the full premium, but at least it takes away the risk about getting coverage.
Hmm, that's curious. I think about that a lot. I am both "diverse" in that I am biracial and "diverse" in the sense that I come from a poor uneducated family.
Note: I use diverse in quotes not because I don't believe it is important but because what diversity means to people varies dramatically.
Isn't “valued at” based on the most recent funding round (in the absence of public trading, the only clear objective measure for a pre-IPO startup), so if they haven't raised since the problems, they'd still be “valued at” the same amount, to the most current available information?
Good point, yes, until there is another transaction we will not know for sure. But I would be quite surprised if they did another round and it would be an 'up' round.
So on average YC companies have raised some 10 m, but what is the median? Similarly to total valuation, this number is probably heavily skewed by a few whales.
It would be interesting to know how many founders were over 40 in S17. It would also be interesting to see if YC has a sense of any difficulties that older founding teams experience in attracting VC funding.
What would be interesting is to look at the distribution of YC's capital over the companies it owns shares of. Is it mostly concentrated in the very big ones? Or is the number of less-than-100m companies large enough that they make up a decent part of YC's total assets.
It's cool that this batch is so international. I'm surprised to see companies from that many different regions. That said, I'm also really surprised, given how international this batch is, that there isn't a single Chinese company.
I agree with these suggestions. Perhaps, I would add the little knowledge about Chinese legislation and the market, which is quite different from other parts of the world. But I think it would be interesting, thinking strategically, YC attracts more Chinese and thus better know the market.
I'm not sure about this batch, but there has definitely been YC companies in the past with Chinese (and HK) founding teams, and based in CN/HK. 9gag, for example, is HK based. I'm also personally an investor in a S15 YC company with mainland Chinese founders.
I have a side question for YC. You often mention that one of the main reasons for a startup to fail is founders dispute. But that applies to you too: you don't know the founders before accepting them. How do you trust the founders so fast? In other words, do you invest in companies in which you wouldn't want to be a founder? I just want to know more about trust, where it matters, where it doesn't maybe, what to look for, that kind of stuff. Sorry if that's irrelevant here.
Agreed. Fintech is huge in all growing emerging markets, especially those driven still on top of cash. No credit card infrastructure to mess with - move right onto digital wallets. China is the obvious example.
I do not think the opportunity in Brazil, for fintechs, is about people using cash. More than 100 million have a bank account, with a card, and more than 70 million have a credit card[0]. Almost every place you go you could use a credit card to pay, including churches and street vendors.
But, is too expensive and too much bureaucracy to take a loan. Big Banks is one of the sectors that most profits in Brasil[1], so they do not care so much about small and personal loans. Or loans to small companies. And the legislation sucks too, politicians have passed a new law that will make even harder to make Angel Investments[2]. Is too risky and expensive for everyone that want to loan money to people. Loan money to government is more profitable and almost without risk to Big Banks and mutual funds. So, there is a huge opportunity to disrupt this.
Well it says $13bn invested, $85bn valuation today. It might be interesting to break that down by year though. The recent investments won't really have had time to play out.
What evidence is there that proves an equal percentage of every race and gender leads to a more profitable company (or has a higher chance of a successful exit)?*
*Because I assume that by listing "UNDERREPRESENTED FOUNDERS" YC wishes there were 50% female founders and 50% male founders? And what about the racial makeup of founders? Is the ideal world for YC a racial make up of 20% white, 20% black, 20% asian, 20% middle eastern, and 20% other?
Okay, I might have a bit of a hot head but: Isn't $85bn total market cap a sign of failure? Especially considering that this includes companies that have valuations because they "just raised money on high cap".
Given that the valley now has multiple companies with $500bn+ market cap; and in the "still raising money" valuation there are companies with $50-100bn valuation; it seems to me that $85bn is rather very small.
Or more like YC has worked well for the average founder but sucked at picking even one of the bigger winners?
(I didn't downvote.) Winners take a long time to develop. YC's pipeline makes it likely that the new ones will go through it. It's probably more likely now than in 2008, meaning a YC applicant today might be that 500bn company in 10 years.
That's not my point. My point is YC is getting top attention and has a big (the biggest?) name in Early stage funding. That doesn't seem to translate to being a leader in picking winners though.
It doesn't have to! All they need to do is do well enough that they can continue to attract new talent and be founder friendly, and do this for the largest talent pool.
And this is what seems to be the case, there is no other program that has launched as many start-ups as YC has done and there is no other program that has done this for as many founders as YC has done. The network effects of that are tremendous.
I don't see how $85B is a sign of failure when there are bigger companies out there. Isn't what's important the return on investment? I imagine that (in terms of paper gains) YC has returned a large multiple of their initial investments in companies.
> Isn't what's important the return on investment?
Well, that depends on who you are. If you are a partner in YC, yes, ROI is your metric. If you are a founder, no, the long-term median value of all YC companies is a far more meaningful metric than YC's ROI. In particular, how much of that value comes back to the founders vs. the investors.
I can bet, if YC had the stats for race/ethnicity amount who applied, we would be shocked of the amount of blacks or Latinos who were never accepted. Especially from the early days.
Count me and a few other Hispanics who never have been accepted. The only time its cared about is after the fact and just for show purposes like this.
On a side Note: Yc doesn't understand people like me will never have the resume they are looking for, but have the talent and drive. I could game the application process to get accepted. Because we know what you accept and its not just a race issue.
Slightly related: I'm curious about educational background and the impact on admission.
The figures for Summer 2017 are 72 different universities out of 294 founders. That seems like a pretty specific group within academia. Possibly a set of highly selective universities. I'm curious if the applicant pool similarly as narrow, or if the brand of one's alma mater bears relevance to the process.
As mentioned prior, a piece of paper is a poor proxy for talent and drive.
I'll email you sometime and I appreciate the response.
Just to set my example, how many staff at YC are black or Hispanic in the list below? I find it odd considering the amount of population of these groups in the USA alone. Not many startups cater to this demographic, if they aren't being accepted.
You may have a point. The decision of who to fund may rely in part on seeking people similar to oneself and if the demographics of the applicant pool are not reflected in the staff of YC it may skew the outcome against minorities.
Why does the concept of free association stop, and the and the chilling effect of we can't be seen together without a representatives from every phenotype begin?
When do we start to demand that Latino rap groups (eg. Cypress Hill) hire to meet diversity quotas?
It stops when you're large enough that statistically speaking you should have people of all walks of life in your portfolio. If you then don't that's proof that there is some kind of bias at work.
How do we determine whether the bias is caused by the employer or whether by the applicants?
Anyway, I'll agree that we need to have this conversation, and we need to work out some way of applying some rules that seem somewhat fair, and that the issues should be dealt with on all fronts.
We, in Australia anyway, already have varying rules / laws / regulations that apply to a workplace depending on the number of employees and / or revenue. So it would seem to make sense that diversity quotas would be applied in a similar fashion. I mean if we, as a society, believe that's necessary, which does appear to be the direction we're headed.
I guess I tend to recoil from the idea because I work in heavy steel fabrication and construction. The job roles in this industry tend to be very traditional with regard to gender. Women work the administrative side, men do all the dangerous / dirty / heavy / hot / long hours work. And as far as I can tell everyone is okay with that.
Until I see diversity quotas applied in the job roles that kill and injure men at work it's a little hard for me to take serious this ... squabbling ... in tech industry.
What might be best is, since this doesn't really involve me, as in: I don't work in the hotbed-tech-industry-in-a-large-city, I might just stay out of the conversation.
> Until I see diversity quotas applied in the job roles that kill and injure men at work it's a little hard for me to take serious this ... squabbling ... in tech industry.
That argument was beaten to death years ago. The basic outcome is this: you should allow people to work where they want to work, anything else is conscription (the Soviets tried this with predictable effects). So unless you are willing to force people to work in jobs they don't want diversity won't be 100% across all kinds of jobs simply because people self select for the kind of jobs they feel they can do and which will not lead to them getting injured or killed on the job in higher numbers than those that are physically more suited to doing that work.
So the diversity conversation will center on those professions where such innate differences won't make a difference. Even so there are women who do traditional 'mens' jobs and do them well but they are rather the exception than the rule.
And very few of those 'mens' jobs are really in that category, most of the time it is simply tradition rather than some actual basis in fact. Though I'll definitely yield to there being some of those in the steel industry, I've worked near two steel plants (IJmuiden and Sault Ste Marie) and know many steelworkers and would definitely not see them being replaced by females (or less bulky men) any time soon.
That said I do know a female welder and there are plenty of women in construction who don't care about danger (which should be avoided anyway), dirt or heat and for 'heavy' we have cranes.
You can achieve gender quotas without conscription. For example, the state could institute a policy to favor bids from companies with no gender segregation. No one would force women to work at a construction companies, but those companies would suddenly feel a major pressure to get female employees. Similar, the government has multiple dangerous / dirty / heavy / hot / long hours work that they sub contract, and all those could get the same treatment.
You could also do the reverse and encourage men to get into more safe work, while freeing up competent women to go into typical male professions. Both psychology and veterinarian have both around 10 female applicants per male, and the median school grades needed for both is very high. 40% of those women could easy be denied a spot in those female dominated professions in favor of gender diversity, and could then go into tech. It would be very interesting if a large veterinarian company and IT company would join in a pledge to hire one minority gender employee if the other did so. A "fair trade" in the area of social activism.
Why not accept people based on their skill and merits and not the color of their skin? Why should YC choose someone simple because he is black?
Only 16% of the U.S. population is black, the amount of black people YC has accepted is not completely off, plus there is no reason it should exactly match the population make up of the U.S. anyway.
The numbers of accepted hispanics tells you nothing about that on it's own, you'd need to know how many hispanics apply.
For women for example you can see from the numbers that there is no bias in the acceptance rate, the thing is that very few women apply. Could be the same for hispanics. I don't know what proportion of engineering students are hispanics but it's likely that as for women the underrepresentation starts already in school.
What evidence is there that proves an equal percentage of every race and gender leads to a more profitable company (or has a higher chance of a successful exit)?*
*Because I assume that by listing "UNDERREPRESENTED FOUNDERS" YC wishes there were 50% female founders and 50% male founders? And what about the racial makeup of founders? Is the ideal world for YC a racial make up of 20% white, 20% black, 20% asian, 20% middle eastern, and 20% other?
The decision of who to fund may rely in part on seeking people similar to oneself and if the demographics of the applicant pool are not reflected in the staff of YC it may skew the outcome against minorities.
So then you are saying they discriminate against e.g. Hispanics, but subconsciously, while at the same time consciously they want to show off how many hispanics they acccept.
>On a side Note: Yc doesn't understand people like me will never have the resume they are looking for, but have the talent and drive. I could game the application process to get accepted. Because we know what you accept and its not just a race issue.
I would venture to guess that YC understands more than you think. How could you game the application process to get accepted and what purpose would it serve? Sure you could misrepresent who are the founders in the video but don't you think they would not at the interview, assuming you would be offered an interview?
I guess my question would be ....game the application to what end? While you clarified that you would not game the application I would venture to guess that it has probably happened or at least been seriously contemplated by other applicants.
It seems to me that this would certainly be a very unwise decision given that the YC community is very tight knit. I guess there are those who would hope that if just given the chance to be heard during the interview that YC would see the passion and determination but it seems like it would be a very unwise way to start what he/she hopes would be a long term relationship. As you said, the application could be gamed but I don't think it would be looked upon as a good move and given the number of applications that YC receives, such a move is a terrible waste of the YC screeners valuable time.
I always get the impression that they make a particular effort to understand groups outside their typical applicants and look for opportunities in other countries and cultures.
Surely there's every chance that your application isn't strong enough?
By no means am I saying I should of been accepted. I'm actually saying the opposite, I don't fit the mold and probably lack many things, but I rather look at it as a whole. The truth is the staff at YC lack blacks or Hispanics. And just recently started accepting Hispanics and black founders out of a current trend/topic for tech companies to accept diversity. If it wasn't brought up, would YC have made it a point to accept more blacks or Hispanics/woman now?
I think YC is great, but they don't get the fact that founders can have a horrible application or even look horrible on paper.
Being an entrepreneur is not a cookie cut process, nor is business or anything else.
"And just recently started accepting Hispanics and black founders out of a current trend/topic for tech companies to accept diversity."
This is either very poorly worded or unfairly incorrect. When have they not accepted black or Hispanic founders?! They might have attracted mostly white/Asian applicants, but they have never precluded any group.
"...they don't get the fact that founders can have a horrible application or even look horrible on paper."
Of course they get that fact. They often speak about how often they miss opportunities - it's not a charity and they can't pick every winner in advance. They don't just judge applicants on paper. They take a video, and they look at product traction and so on. They have people from all sorts of backgrounds showing it's not a cookie cutter process.
But if you do a bad job at presenting/explaining yourself and your idea, there's every chance you'll have similar struggles pitching to investors and customers.
There's at least one black guy in that list and he's been there for a few years. He was also involved in one of their early and well-known investments.
You've implied that they only started accepting black/Hispanic people like they've been banned or something?!
I think there are some implicit bias. I've noticed that most black startups in accelerators cater to other black groups or hail mostly from Africa.
If not being strong enough was a criteria then you could guarantee that every startup would succeed, but looking at a lot of accelerators, there is still a high rate of fail, so who is to say strong enough? I've also seen people you least expect to succeed often succeed and some that you would expect to succeed fail...
Your best bet as a black/latinx founder is to be that outlier or build something for your own group...
* How many companies with only a single founder?
* How many companies are founded by people who are not native english speaker? I mean, an entire non english speaker team, e.g., all of them were born in Russia or China and came to US in a "late" age (e.g., after 22), instead of Canada, UK etc.
It would be more interesting if we can see a YC-funded company that is founded by a single founder who is not a native English speaker and came to US after 22 and he/she is now over 35 :) This somehow makes the game harder to play, but it would be challenging and fun and inspiring :)
The stereotype of a YC company is still multi-founder + at least one native english speaker + young. It will be certainly an outlier of outlier if there's ever a YC company that sets an inspiring example that single founder + non native english speaker + "old" can be accepted to YC and can succeed. Or we may need a YC-clone that is started in non-english-speaking countries or is started by a first-generation non-native-english-speaker immigrant in US.