snowmaker

There are a couple of things in this comment that aren't true, and I want to respond to make sure that people reading it don't come away misinformed.

YC does not distribute lists of "top companies" to investors, around demo day or at any other time. Quite the opposite - we take great pains to ensure that investors at demo day see all companies as equally as possible.

About other venture firms being investors in YC, it is true that Sequoia was once an investor in YC's funds, but that was a decade ago. We haven't had a venture firm as an investor in YC in many years to ensure there is an even playing field.

1) It's not quite accurate to say that YC is running out of money, though I could see how the article could read that way. YC is fortunate to be well-funded. However, we saw that if we continued our previous pro rata policy, that that could eventually happen someday, so we made a proactive adjustment well ahead of time.

2) One of the consequences of our old pro rata policy was that it left us without control of how much money we spent. Because we committed to investing in every round of every YC company, our spending was dependent on how many companies raised money, which turned out to be hard to predict. Imagine running a company where your monthly budget could vary by millions of dollars and you wouldn't know until the end of the month how much you'd need!

3) As far as I know, no other investor in the world has a programmatic pro rata policy (what YC tried from 2015-2019, which we are stopping now per the article). The whole idea was a bit of a crazy invention, and while its motivation was good, unfortunately it turned out to have too many drawbacks.

The thing about fiddling with liquidation preferences is that it's very hard to change and will have minimal impact on the bottom line for employees. Liquidation preferences only matter in the case of companies that fail, where they might make the difference between making $0 and making a tiny bit of money. Employees will make virtually all of their money on the companies that are successful.

While this may have been intended as a joke, it may actually be useful to people who want to do business in America.

We do our best to vet the eventual scientific feasibility of these ideas, but it's along the lines of "it makes sense in theory", not "it will definitely work".

Because, as you said, our understanding of biology is so incomplete, I think that is the best that is possible right now. But I think that's ok. We (as a society) should be pursuing all the ideas that make sense. Some will work out of the box, some will work with modifications, and some just won't work at all. But this is the only way I know to make progress.

It seems if I can paraphrase your argument that it boils down to: "Just because your drug works in a mouse doesn't mean it will work in a human. So even if it works in a mouse there is still a lot of technical and scientific risk left."

I certainly agree with that. But I don't think it's incompatible with what I wrote in the blog post. The way the economics of the pharmaceutical industry work, it is still worth taking drugs into human trials even if the chances of them working are small.

Y Combinator has one president, Geoff Ralston, who is the president of YC Group, the parent organization.

It has two CEO's: Michael Seibel, who is the CEO of YC Core, the twice-a-year program YC started with, and Ali Rowghani, who is the CEO of YC Continuity, the fund that makes large investments in YC companies when they are at a growth stage.

There are 18 full-time partners, who primarily select and then work with the companies we fund.

Because gasoline is a premium energy source, if we can produce it from photovoltaic sources, we can effectively mark-up photovoltaic electricity. In the long-term, that would make it economical to greatly expand our photovoltaic capacity. The cost equivalence Prometheus is aiming for is: Market price of 1 gallon of gasoline > cost to produce 1 gallon of gasoline using renewable energy.

Another factor is that Prometheus production works in remote areas where transmission losses for electricity are high (i.e., remote hydroelectric plants).

If the alternative state of the universe is you drove the same car but burned gasoline that was drilled out of the ground, then this is much better.

Roughly half of the companies that join YC are new companies that are just getting started (< 6 months old), and roughly half are more established companies. There are even a significant number of companies each batch that are pretty large (say, > 20 people).

We do get pro rata rights, but we don't care about the option pool.