Darts at the board: Y Combinator's strategy, visualized

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Y Combinator is refocusing. The prolific startup accelerator announced plans this week to move away from investing in mature private companies, as CEO Garry Tan found investing in later-stage companies to be a distraction from the core mission — helping founders “make something people want”. The move, which includes layoffs of 17 staff members, was reportedly planned before the collapse of Silicon Valley Bank.

YC’s focus has always been backing early-stage founders, some of whom may only have an idea or rudimentary demo of a product, in its twice-yearly startup accelerator cohorts — an approach that’s created a remarkable list of alumni.

Darts at the board

Having now funded over 4,000 startups, with a combined valuation exceeding $600bn, it’s almost guaranteed that everyone in America has used at least one product from its portfolio of companies. If you’ve booked a holiday on Airbnb, ordered food through DoorDash or paid for something online with Stripe, you have YC to (partly) thank.

Although the specific investment terms have changed through the years, YC’s strategy has been consistent and it perfectly encapsulates investing in risky start-up companies: many will fail, most will be unspectacular, and a handful will (hopefully) be home runs that pay for everything.

While the earliest cohorts were just a handful of companies, the most recent batches have been in the hundreds — YC’s startup directory lists more than 2,400 investments from just the last 5 years. It’s safe to assume that there’s already a future success like Airbnb, Reddit, Twitch or Stripe in one of those batches.

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