Y Combinator – Wikipedia, the free encyclopedia

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This article is about the venture capital firm. For the mathematical term, see fixed point combinator.
Y Combinator

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Type Limited liability company
Industry Venture Capital
Founded 2005
Headquarters Mountain View, CA
Products Investments
Website http://www.ycombinator.com/

Y Combinator is an American seed-stage startup funding firm, started in 2005 by Paul Graham, Robert Morris, Trevor Blackwell, and Jessica Livingston. Y Combinator provides seed money, advice, and connections at two 3-month programs per year. In exchange, they take an average of about 6% of the company’s equity[1].

Compared to other startup funds, Y Combinator provides very little money ($17,000 for startups with 2 founders and $20,000 for those with 3 or more[2]). This reflects Graham’s theory that between free software, dynamic languages, the web, and Moore’s Law, the cost of founding a startup has greatly decreased[3].

The firm is named after a construct in the theory of functional programming called the “Y combinator“.[4]

Contents

[edit] History

Y Combinator was started after Graham gave a talk at his alma mater, Harvard (where he earned a PhD in Computer Science), which became, “How to Start a Startup”.[5] He suggested founders seek seed funding from “angel investors“, preferably those who had made money in technology. He half-jokingly added “but not me”, but, feeling guilty[6], he soon after organized Y Combinator to offer seed funding to startups.

From its inception to 2008, one program was held in each of the US cities of Cambridge, Massachusetts and Mountain View, California; in January 2009, Paul Graham announced that henceforth the Cambridge program would be closed and all future programs would take place in Silicon Valley [7].

[edit] Notable portfolio companies

As of June 2009, Y Combinator had funded over 118 [8] [9] startups. The number of startups funded in each cycle has been gradually increasing. The first cycle in summer 2005 had eight startups. In the summer 2010 cycle, there were 36.

Some of the better-known funded companies include: Scribd, reddit, Justin.tv, Bump, Dropbox and Posterous.[2]

[edit] See also

[edit] References

  1. ^ “Running a Hatchery for Replicant Hackers”. New York Times. 2006-02-21. http://www.nytimes.com/2006/02/21/business/businessspecial2/21startup.html?pagewanted=print. Retrieved 2008-08-27. 
  2. ^ a b “Y Combinator Frequently Asked Questions”. http://ycombinator.com/faq.html. 
  3. ^ “Planning for a Crush of Startups”. BusinessWeek. http://www.businessweek.com/smallbiz/content/oct2007/sb20071019_378998.htm?chan=technology_technology+index+page_top+stories. Retrieved 2008-08-27. 
  4. ^ See Y Combinator FAQWhy did you choose the name “Y Combinator?” The Y combinator is one of the coolest ideas in computer science. It’s also a metaphor for what we do. It’s a program that runs programs; we’re a company that helps start companies.
  5. ^ “How to Start a Startup”. Paulgraham.com. 2005-10-21. http://www.paulgraham.com/start.html. Retrieved 2010-03-02. 
  6. ^ Kessler, Michelle (2007-07-18). “Hungry entrepreneurs eat up Y Combinator’s help”. USA Today. http://www.usatoday.com/printedition/money/20070718/b_ycombinator.art.htm. Retrieved 2008-08-26. 
  7. ^ “California Year-Round”. Y Combinator. http://ycombinator.com/ycca.html. Retrieved 2009-01-29. 
  8. ^ “Y Combinator – What we do”. http://ycombinator.com/about.html. 
  9. ^ “Seed Stage Accelerator companies”. http://spreadsheets.google.com/ccc?key=0AkkhSN3vaY4jdF90b1l1Vnl5NmZjaTBNQWlJYVozMEE&hl=en. 

[edit] External links

Private equity and venture capital investment firms

Investment strategy
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History
Investors
Private equity firms · Venture capital firms · Portfolio companies

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