Y Combinator has raised $700 million for a later-stage fund that will be run by now full-time partner Ali Rowghani. Originally reported by The Wall Street Journal, this new investment vehicle will be used to fund select companies well after they’ve graduated from Y Combinator’s accelerator program. Basically, the firm has decided it’s time to pick which of its startups will really succeed.

In a blog post, chief executive Sam Altman wrote that Y Combinator is considering leading or participating in later-stage growth financing rounds of its portfolio companies. Furthermore, it isn’t shying away from taking board seats “where it makes sense for founders, but do not expect to do so in every investment.”

Playing up the concept that it’s a founder-friendly organization, Altman explains that he hopes to do the same with maturing companies that Y Combinator has done with early-stage startups.

But Altman makes this clear: The fund will be focused on those specifically in the Y Combinator portfolio, not outside. So if you’re looking for funding, you’ll have to graduate from the accelerator. Y Combinator will also not lead seed or traditional series A rounds.

What is likely to happen is that instead of hedging their bets in the early stages by giving a small seed investment to dozens of companies, this new investment vehicle is more serious about picking winners — those that will be the next Airbnb, Dropbox, and Stripe.

Y Combinator already has multiple options for startups to get funding, including through its traditional accelerator. Additionally it has its new YC Fellowship and is always finding new ways to not only educate but encourage entrepreneurs on how to start a business. But now it’s time for the later stage game, and that’s what this Continuity Fund is all about. And we shouldn’t forget about those moonshot ideas that’ll come out of YC Research — Altman has hinted that up to $100 million could eventually be invested in those ideas.

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