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Back to Garry Tan on the Past, Present, and Future of YC, with Garry Tan.

How Did Coinbase Carry Initialized Fund One?

Initialized Fund One was a $7 million fund that returned more than 55x DPI. Most of that return came from Coinbase and Instacart.

The fund backed a hundred companies. The DPI on 98 of them added up to about 1x. Instacart was another 1x, and the fund could not take any pro rata because Sequoia did. On Coinbase, the fund took the pro rata in multiple rounds and ended up turning the fund 53x.

The power law is astonishing and unbelievable. Reading about a return like that and hearing about it still leaves it hard to believe until one company does nearly all the work.

Grokipedia·Coinbase·Instacart

Transcript

Garry Tan on the Past, Present, and Future of YC ·

The Peel with Turner Novak

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  4. How Did Office Hours Turn Garry Tan Into an Investor?Garry Tan joined YC with no plan to invest. After he raised and quit his startup, he was really burnt out and needed to recuperate.
  5. What Share of Giant Startups Came From Y Combinator?Garry Tan says Y Combinator is a managed marketplace for the smartest people starting the next companies, and he calls the setup a good thing.
  6. Why Does Surviving Rejection Mark a Y Combinator Founder?Garry Tan says 99% of people who apply to Y Combinator end up getting a mortal ego wound by being rejected.
  7. How Many Y Combinator Applications Get Rejected?On The Peel, Y Combinator gets about 80,000 applications a year. Something like 78,500 of them are mortal wounds, the rejections handed out.
  8. Why Do Two Y Combinator Years Beat Twenty in Venture?Two or three years of YC time as a partner is equivalent to 20 years in venture. The 15 partners are practitioners of product market fit.
  9. Why Did Y Combinator Stretch the Batch to 13 Weeks?Garry Tan says Y Combinator just extended the program to 13 weeks. The team talks to people about how things went and what can be done better.
  10. How Did Bathroom Notes Get Airbnb Funded Early?The weekly growth chart on bathroom Post-it notes is why Airbnb raised from Sequoia before demo day.
  11. Why Did Y Combinator Build Bookface?Bookface is internal software at Y Combinator. On The Peel, Turner Novak had heard about Bookface and asked whether Garry Tan made it. Garry Tan said yes.

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