17/2,000 = 0.85%
Compare to i.e. Jason Calacanis who on his own has a hit rate of better than 1 in 20. Now assuming YC paid $100K per company and gets to keep a blended 1% of the $100B (is that too small?), they've put in about $200M in funding to get back
$100B*1% = $1B
to net roughly $800M in profit for their stakeholders. So they're a 5x fund. But that's really...not that good...(at least it's not world class).
But am I missing something? They've definitely gotten a lot better at picking companies during the Sam Altman era (by, IMO, funding deep tech companies that actually have the chance of 10,000xing), but it'll still take another 5-10 years to really prove that.
Now YC might argue that they're not purely a profit-driven fund. And that's true. But isn't it a bit worrying that after thousands of investments they haven't funded a single $100B+ company? YC has an enormous influence on the startup ecosystem. Is an institution with a 0.85% hit rate really sending us the right lessons?
a 5x return on an _investment_ isn't that good but a 5x return on a _fund_ is very good.
In my opinion it's enormously unusual to find a product market where 100B in future profits are up for grabs and a testament to mans inventiveness that we are even having this discussion. In a competitive market I'd expect the chance of a unicorn to approach zero. And it doesn't! It's awesome and takes a whole lot of failure.
On the side of the investors I'd be in the boat thinking it's more of a lottery than a skill, but these funds seem to prove otherwise so while I wouldn't invest in them and caution my company to be careful, I hope my pension fund is in them, a little.
Take all these together and you are looking at a much higher fund multiple than 5x. My estimate would be at least an order of magnitude higher.