We are excited to bring Transform 2022 back in-person July 19 and virtually July 20 - 28. Join AI and data leaders for insightful talks and exciting networking opportunities. Register today!


Silicon Valley’s Y Combinator wields a powerful influence over the startup world. But president Sam Altman is apparently a bit worried there might be too much hype surrounding the accelerator program’s graduates.

In a recent interview with Rachel Vanier of Paris’ Station F Startup Campus, Altman cautioned that not all startups coming out of the famed program are necessarily worthy of or ready for funding. When asked by Vanier about Y Combinator’s famed Demo Day event and who gets funded, he replied:

“Not all of them, but certainly a lot do. In fact, probably too many. I think there’s sort of this halo around being a Y Combinator company, where companies raise money that perhaps shouldn’t.”

Each Demo Day has become a major event in the Silicon Valley calendar, drawing many of the biggest names in venture capital. Given Y Combinator’s track record and impact, there’s no doubt a willingness to back companies that pass through its doors, following the footsteps of unicorns like Dropbox, Airbnb, and Stripe.

Officially, Y Combinator says it has funded 1,464 startups and that its alumni are worth a collective $80 billion. But investors and entrepreneurs alike shouldn’t be blinded by that success and assume graduation day is the right time for a company to raise money.

“It’s a real commitment to raise money,” Altman said. “And you want to have some evidence that what you’re doing is going to work before you lock yourself into that path.”

VentureBeat's mission is to be a digital town square for technical decision-makers to gain knowledge about transformative enterprise technology and transact. Learn more about membership.

Author
Topics