December 12th 2012

The Launch Pad. Inside Y combinator Silicon Valley’s most exclusive school for startups. Randall Stross

Image representing Y Combinator as depicted in...

The Launch Pad. Inside Y combinator Silicon Valley’s most exclusive school for startups.  Randall Stross. 2012. ISBN  9781591845294. The author( a good  writer)  spent the summer of 2011 with the 64 start-ups funded by Y combinator and recored what happens.  It is three month uber intensive (selective 3% of applicants get in)  program ending in a marathon Demo Day in front of several hundred qualified investors.  The book has similarities to Tracey Kidders 1981 classic , The Soul of New Machine,  in that all the covers are off and you get to look right into how it is done – warts and all.  This makes this a new classic.  Y Combinator is really Paul Graham the founder, and his core of follow on investors who put up $150 00 for every company that demos.   About 2/3   of the companies each session get even more follow on investing, 1/3 a small amount more and 1/5  none at all.  The success rate shows that by 2010,  Dropbox exited for more than  the next 199 all together , and No 2 OMGPOP exited for more than the next 198 cos altogether. Perhaps you can add up 21 of non exiting stars who had a value of $ 4.7 b. So the odds are long, but this model appears to work better than any other startup model.   You need highly selective auditions, companies that had a killer coder and a killer salesperson,  non stop attention to the job at hand and sufficient guaranteed follow on  funding to make the time/effort  expended worth the while of the participants.

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