How Did a Summer Internship Experiment Grow Y Combinator?

On the show, the person leading YC says the program started as an experiment by Paul Graham and Jessica Livingston to give small amounts of money, almost summer-internship style. His own batch paid only about $13,000. Twenty years in, YC is going on more than 100 billion-dollar companies.

People apply online, so a founder does not have to know anyone. YC accepts about 1% of the people who apply. Getting in brings half a million dollars for about seven percent of the company, and he says a YC partner matters more than the money. He is one of 15 people who select companies: they read the application, watch the video, meet the team for 10 minutes, and decide yes or no on half a million dollars within the 10 minutes. He thinks Shark Tank has zero billion-dollar companies.

The first YC batch had Reddit with Steve Huffman and Alexis Ohanian, plus Sam Altman, whose company Sequoia funded. He believes another company sold to Amazon. The batch succeeded, so they kept going, and the internship-sized check of about $13,000 became half a million dollars.