"Meaningless" is hyperbolic. How much would you pay for a share of Airbnb? More than nothing, I assume. I think one can conclude something from consummated, informed responses to this question.
Does 65B represent the actual money value that people will pay for the shares of 100% of the ~600 currently existing YC companies?
Does it tell us the average value? The mean? Standard deviation? Quintile distributions? P/E? Is that number just based on valuations from funding rounds? Projections?
It is literally meaningless. It is not verifiable. The standards that are used to calculate it are not explained. There is no explanation to how it relates to the companies in the portfolio.
I'm a bear by nature. I think that the current batch of SaaS unicorns have an unsustainable valuation, and I think this unverified number feeds into that.
What the returns will be is an unknown, of course. But to say that is "meaningless" is either naive or a misuse of the word. Stock prices and market caps are decided the same way.
Private stock prices are the last price someone was willing to buy that stock at.
It is slightly less simple, because you may give a discount for advice, but private stock prices are definitely reliant upon supply and demand. If one investor wants to set your valuation at $1B and another at $100m, you go with the one who offered a $1B valuation. There is occasionally a discount for advice/connections, but the mechanism that the highest bidder wins is generally the same. Private market stocks are by no means exempt from economics or supply and demand.
Total: $45 Billion.
Source: http://graphics.wsj.com/billion-dollar-club/
So they value the rest of the portfolio at $20 billion. Does that seem reasonable?
$65 billion / (940 companies) = $69 million / company
A more interesting observation is that two companies account for over half of the $65 billion. Airbnb's most recent valuation was reportedly $25 billion, and Dropbox's was reportedly $10 billion. These companies are not likely to go away overnight a la Homejoy, but their valuations are going to be hard to sustain. Dropbox in particular would be a very tough sell to the public markets at its private market valuation given its comp[1].
Making analysis even more difficult is that today's big money, late-stage deals have lots of strings attached, so these valuations are hard to assess without knowing all of the details.
Final comment: despite the constant suggestions to the contrary, YC's portfolio appears to live in the very same power law reality as most early-stage investment portfolios in Silicon Valley.
[1] https://www.cbinsights.com/blog/dropbox-valuation-bubble/
There you got your response at the beginning of the post. It seems that you are attacking for the sake of attacking? Sam is providing these data because people asked for them.
What I'd like to know is the value, at exit, of the companies that have exited or gone public. Because I can guarantee you that the "valuation" of $65B+ is a totally meaningless number. This includes every single company that had a huge, unsustainable up round which will almost certainly be devalued based on future financings or exits.