Y Combinator

Y Combinator (YC) is an American technology startup accelerator launched in March 2005. It has been used to launch more than 3,000 companies, including Airbnb, Coinbase, Cruise, DoorDash, Dropbox, Instacart, Quora, PagerDuty, Reddit, Stripe and Twitch.

The combined valuation of the top YC companies was more than $300 billion by January 2021. The company's accelerator program started in Boston and Mountain View, expanded to San Francisco in 2019, and has been entirely online since the start of the COVID-19 pandemic. Forbes characterized the company in 2012 as one of the most successful startup accelerators in Silicon Valley.

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

From 2005 to 2008, one program was in Cambridge, Massachusetts, and one was 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 be in Silicon Valley.

In 2009, Sequoia Capital led the $2 million investment round into an entity of Y Combinator to enable it to invest in approximately 60 companies a year. In 2010, Sequoia led an $8.25 million funding round for Y Combinator to further increase the number of startups the company could fund.

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

In September 2013, Y Combinator began funding nonprofit organizations that were accepted into the program after testing the concept with Watsi.

In 2014, Sam Altman replaced Graham as president of Y Combinator. In 2014, Y Combinator began a new deal for startups, offering $150,000 for 7 percent equity.

In 2014, Altman announced a partnership with Transcriptic to provide increased support for Y Combinator's growing community of biotech companies. In 2015, he announced a partnership with Bolt and increased support for hardware companies.

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

In January 2016, Y Combinator changed the fellowship 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. The fellowship was discontinued in 2017.

In 2016, Y Combinator 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.

Former Twitter chief financial officer and chief operating officer Ali Rowghani, who was in charge of the YC Continuity Fund when it began, became CEO of YC Continuity. Michael Seibel, who co-founded Justin.tv, became CEO of YC Core, the program that Paul Buchheit had run since 2016.

In 2017, Y Combinator began Startup School, an online course that released public videos and coached individual startups. More than 1500 startups graduated the program in its first year.

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. But the ensuing outcry led Y Combinator to change course again and decided over an official blog to accept all those 15,000 companies. Now, every company is accepted to join YC Startup School without any restrictions.

In 2019, Geoff Ralston replaced Altman as president of Y Combinator.

The summer 2020 batch was conducted remotely via videotelephony due to the COVID-19 pandemic.

In the summer of 2022, Y Combinator intentionally shrunk the number of startups within its accelerator down 40% from 414 companies to 250 companies.

Y Combinator's motto is “Make Something People Want.” 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

It has been used to launch more than 3,000 companies, including Airbnb, Coinbase, Cruise, DoorDash, Dropbox, Instacart, Quora, PagerDuty, Reddit, Stripe and Twitch. The combined valuation of the top YC companies was more than $300 billion by January 2021.