By any other name

Thursday, 20 Feb 2014

Amit Chatwani:

It turns out Paul Graham runs a “startup accelerator” located on 320 Pioneer Way in Mountain View, CA called Y-Combinator. Y-Combinator makes micro investments into very early stage companies and then helps these companies raise venture capital. Thousands apply for a few slots in two “classes” per year. AirBnB, Dropbox, and Reddit are among its alumni.

The accelerator takes small amounts of risk and offloads that aggregate risk onto a market of investors (the VCs). Its Demo Day, which first showcases its companies, is a coming out event, like an IPO. And it attracts top young graduates, like my cousin, from across the world. I spent nearly a decade on Wall Street, and let’s be clear: that’s our model. Employing Type A personalities to shuffle around amorphous blobs of questionable value is not called a “startup accelerator”; it’s called Investment Banking.