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Ask HN: How are meh founders becoming partners at yCombinator / 500 startups?

5 points by ActsJuvenile ↗ HN
I have seen this happen twice now:

Someone launches a no-one-knows-about-it start-up company, and raises angel / series A funding. The company gets acquired for $5m.

Next thing I see is that the founder is now a partner at an incubator and working as a tech investor. I have seen this at both yCombinator and 500-startups. Case in point: Harj Taggar.

How is this possible? After the acquisition the founder would have barely netted $2m. Is the bar for entry to partnership at a prestigious place like YC so low?

2 comments

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onion2k
Building a business that exits for $5m makes you an exceptional founder, especially a decade ago. That was only a few years after the dot.com crash. And Harj did it in about a year and a half, so you can't really compare his business to the decade or more of growth of businesses like Facebook or Uber.

Any exit is quite rare; one that returns a decent multiple to the investors is much more rare. Don't put down the hard work and exceptional capability of a founder who achieves success.

ActsJuvenile
I am trying to calibrate my internal scales to Silicon Valley price tags, not trying to put anyone down.

For reference, a popular deli and catering service in my hometown makes a profit of ~$1m a year. A good McDonalds location nets more than $2m a year. A dad and sons medical practice nets over $5m.

Required investment to become a partner at YC seems quite low to me compared to these traditional businesses. I was under the impression that YC would need something like $30m-$100m investment to become a partner.