At TechCrunch Disrupt on Tuesday, Y Combinator’s Harjeet Taggar said that the incubator’s next class will have at least 80 startups, up from 65 in the prior group. Even though Y Combinator is hosting its largest class ever, it was also the most selective class the incubator has ever had, with just a 2 percent acceptance rate.
While Y Combinator grew its class size by about 20 percent, the number of applications increased 50 percent. During the evaluation process, Y Combinator conducted about 285 interviews over three rounds of interview tracts.
At the same time that Y Combinator is growing its class size, the amount of money its companies have access to continues to grow. Taggar said that the majority — about 75 percent — raised convertible debt, and the average cap was around $10 million in the last class. That compares to $8 million in the prior group, and “probably $6 million” in the class before that.
Several weeks ago, Kim-Mai Cutler — who interviewed Taggar during the session — asked the question, “How Does Y Combinator Scale Y Combinator?” So how does it do that? According to Taggar, one of the main scaling issues that Y Combinator has faced is just around spending time with the startups that join. When he joined back in 2010, office hours were mainly done by Paul Graham. One way that Y Combinator has adjusted is simply by adding other partners to provide office hours.
Another change is the addition of group office hours. Not only has that meant that Y Combinator can reach more startups, but according to Taggar, it also has created serendipitous connections between participating companies. That way, the companies can actually help each other, rather than just relying on mentors and YC partners.
Y Combinator is a venture fund which focuses on seed investments to startup companies. It offers financing as well as business consulting along with other opportunities to 2-4 person companies looking to take an idea to a product. Y Combinator looks for companies with “good” ideas over companies with experience and a business model. The company made its first investments in Summer 2005. Y Combinator selects companies to finance and consult with twice a year. They are located in...