Y Combinator: We dive into YC, the start-up incubator that has backed both Airbnb & DoorDash

12/10/20 7:00PM

This week two tech giants debuted on the stock market: Airbnb and DoorDash, with both companies soaring on their first day of trading — DoorDash shares jumping more than 85% from their IPO price, and then Airbnb more than doubling yesterday.

Whether we're in a stock market bubble is, unfortunately, a story for another day, because apart from soaring valuations these 2 companies have something else in common: both were backed by the prolific start-up accelerator Y Combinator.

‍Darts at the board

‍The start-up directory on the Y Combinator website suggests that, since its first cohort in 2005, YC has invested in more than 2400 companies, with Dropbox, Stripe, Twitch, Reddit&The Athletic among some of the most valuable and well known of their investments to date.

For their latest batches, YC offers a set investment of $125k in return for 7% equity in the start-up, terms that have changed over the years and were initially just $20k for 6% of a company.

The YC model of making lots of "little bets" perfectly encapsulates investing in risky start-up companies at the early stage: many will fail, most will be unspectacular and a handful will (hopefully) produce returns that pay for all of the other investments combined.

Take YC's investment in Airbnb. Although Y Combinator's equity stake will have been heavily diluted throughout the years, even owning 1% of Airbnb at today's prices would be enough to pay for literally **every other seed investment they have ever made - and more.

More to come**

‍Perhaps what's most interesting about the YC portfolio is that the majority of the biggest hits they've had are 6, 7, 8 or 10+ years old — when the YC cohorts every year were closer to 50-100 companies, and not the 350-400 they've been doing in the last few years. Safe to say there will be another DoorDash, and probably another Airbnb, in those latest batches.

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Texas sues Netflix, accusing streamer of spying on children and collecting user data without consent

The state of Texas filed a lawsuit Monday against streaming giant Netflix, alleging that the company has built a “behavioral-surveillance program of staggering scale.”

The suit alleges that Netflix is “deceptively designed” to be addictive, using features like autoplay to get viewers hooked, “mining those users for data, and then converting that data into lucrative intelligence for global advertising juggernauts.”

“When you watch Netflix, Netflix watches you,” the lawsuit reads.

“This lawsuit lacks merit and is based on inaccurate and distorted information,” Netflix said in a statement to Sherwood News. “Netflix takes our members’ privacy seriously and complies with privacy and data‑protection laws everywhere we operate.”

Texas is seeking civil penalties of “up to $10,000 per violation” of the Texas Deceptive Trade Practices-Consumer Protection Act, along with an additional penalty of up to $250,000 per violation involving a consumer aged 65 or older.

“Netflix is not the ad-free and kid-friendly platform it claims to be. Instead, it has misled consumers while exploiting their private data to make billions,” said Texas Attorney General Ken Paxton in the press release announcing the lawsuit.

Netflix did not immediately respond to a request for comment.