Stripe Is Now a $20B Company

Stripe is the second most valuable YC company. Total valuation of all companies that YC funded (more than 1,900) now exceeds 100 billon dollars.

Airbnb has a private valuation of 31 billion. Stripe has a private valuation of 20 billion. Dropbox has a public valuation (DBX) of 11 billion.

So the two most valuable companies account for about half the total value of all the YC companies. This is what a power law looks like!

And this is why Y Combinator may not be right for your startup. The 100 billion dollars of valuation listed on YC's website may not be up to date, but it's clear that the top 10% of companies make up the overwhelming majority of their portfolio. So they go for moonshots. And they also invest in multiple competitors in the same space in the hopes that one will pan out.

So if you're building the kind of company that might be worth $100 million someday but won't ever be worth $100 billion, VCs and startup incubators might not be right for you, but just remember that a rejection from them doesn't necessarily mean you aren't on to something great.

The thing is that it is very hard to tell, early on, if you have a potential $10M or $10B company.

You're right: if YC had a crystal ball where we could somehow only invest in the $10B kind of company and never in the $10M kind of company, we'd do that.

But I don't think such a crystal ball is possible, because companies morph too much. Famously, Microsoft's first product was an interpreter for Altair Basic, which had a total market size probably < $10M.

So when we see a startup that has an idea that seems small, we ask ourselves, "What Microsoft is this the Altair Basic of?" (http://www.paulgraham.com/altair.html). Most of the companies that today seem like moonshots started with mundane, even trivial ideas.

So if you don't currently see how your idea can become a $100B company, that doesn't mean that you won't figure it out later.