The premise of this question is that each year YC operated produced identical returns. No.

* The alumni network has gotten steadily more valuable

* The signaling value of being accepted into YC has increased dramatically

* YC's direct influence on investors has increased steadily

* The incentives to apply to YC have increased accordingly, setting up a virtuous cycle (you had to be a bit of an oddball to be in that first class)

* Each batch now funds many more companies than YC did in its entire first year

Meanwhile: it takes lots of years to get to a point where you're ready to file S-1; since the nuclear winter in 2001, you need to be doing a huge amount of revenue with a profitability that can be modeled in simple Excel spreadsheets to do it.

So if you figure YC hit its stride 5 years ago, the year Stripe applied, they're right on schedule.

Consider: Square was founded in 2009, with gold-plated credentials, has done very well, and is only now filing for IPO.

I'd have thought the premise of the question was more along the lines of: YC's signalling value grew as a direct result of having great companies in its first few cohorts and supporting them well. And the ethos has been very much focused around building huge companies within VC fund time horizons. Yet the successes [seen so far] in those early cohorts chose to exit through private sales rather than push for the public markets. Is there a reason behind this?

Which is a valid question, even if the pool of potential candidates for IPOs by now really covers only the first seventy or so companies rather than the whole 940. The few companies that haven't privately exited or died in those first seventy or so companies does include Dropbox though...

Can you elaborate on Square's gold-plated credentials? Most of the news / comments I've read about square post their IPO disclosure have been negative (or at least skeptical) - largely to do with the increasing loss rate and the state of the payments market.

Square has prominent co-founders and raised over half a billion dollars from prominent investors.

One way to look at Square is as a company that essentially bought its way into the payments space. The question is whether its premium valuation is warranted.

Some analysts point out reasons to be skeptical[1].

[1] http://www.streetinsider.com/Analyst+Comments/Cowens+Damning...

Famous founder with previous start up success, lots of VC capital, lots of press, lots of growth, lots of hype. Maybe they even have an open office with foosball and Aeron chars (or are standing desks the new status symbol?) As a start up, they're crushing it. As an actual company, you know, the kind where revenue > expenses, they utterly fail it.

No such premise was was intended, or, I believe, implied.

Marc Andreessen answered this question:

The IPO is Dying

http://www.vox.com/2014/6/26/5837638/the-ipo-is-dying-marc-a...

Basically, high-tech growth gains have been privatized. Most of the upside is made via venture capital now.

He made a couple of really important points in that interview though;

that the stock market is now dominated by short-sellers, who in their lust for short term gains, will start rumors about your company and due to regulations, you can only respond in certain ways.

that, in his words, you need "fleets of lawyers and accountants" to meet all the regulations, something only a billion dollar plus company can afford.

that your company's stock will get "batted around like a chew toy", which will really mess with a smaller company.

It sounds like the stock market is a buyer's game these days.

bah, you could always beat those short-sellers by being profitable and generating revenue.

I think there is a simple fallacy in your question, you wrote:

   > After 10 years of success, and a lot of VC-backed
   > companies that would be looking for eventual exits,
   > that seemed like a surprising statistic.

"IPO" is perhaps the smallest member of the set "eventual exits". Take the set of all companies funded by VC money since 2005, take the number of IPOs by VC funded companies since 2005, and you will get a very small number. (If the folks at MatterMark want to pop in here, they have this probability in their dataset).

How could it not be luck of the draw? Do you understand how rare IPOs are?

> Why have none of the ~940 YC companies ever gone public via IPO?

I take issue with your implication: "YC has had no IPOs after funding ~1000 companies". That is a premature call, and (frankly) bending the truth. YC has been taking on more startups per year recently. That skews the age of YC companies to very young. If you assume that an IPO takes > 5-6 years, then results for the vast majority of YC companies aren't even in yet.

> After 10 years of success, and a lot of VC-backed companies that would be looking for eventual exits, that seemed like a surprising statistic.

Sure, YC may have fewer IPOs than normal VCs. That's because they are an early-stage investor, which has much higher risk. Thus, you would expect fewer IPOs compared to a late-stage investor.

> is it something special about the YC ecosystem that tends to not culminate in an IPO,

Citation needed. What is the "expected" number of IPOs? Are there similar early-stage VCs that have more IPOs?

It sounds like you are trying to dig for a problem that doesn't exist. It's like complaining that your favorite baseball team hasn't had enough no-hitters. Who cares, as long as they are winning!

Didn't mean to imply a problem, or a criticism, or anything, really.

My prior would be that the public market has really changed in significance for tech.

the ~900 is the wrong base rate, takes 7-10 years to become IPO eligible, but there were ~100 companies through '08. 0 IPOs after 10 years still seems like a bit of an outlier for a large, unusually successful seed investor.

Line by line refutation usually indicates argument for argument's sake. It is not uncommon for people to go in search of things to take issue with.

Sarbanes-Oxley. It's been a disaster for IPOs. http://www.vox.com/2014/6/26/5837638/the-ipo-is-dying-marc-a...

You're not going to get an answer. I think we all know why.

"We all" = ....?

I certainly don't, and would enjoy insight.

Private VC investors take the gains rather than the public.

Why?

Not clear if you think you're being clever but you're just coming across as annoying

You're struggling with some strong cognitive dissonance there. It is well known we are in a bubble. Everyone but Silicon Valley knows it.

I agree we are running in bubble-like dynamics now. Personally I believe this is driven not by dumb money but more by the fact that the rest of the economy has been under-performing since '08, and therefore smart money is looking for any investment that improves odds at big results. I honestly don't know if this distinction will matter at the end or not.

On the other hand, you could have spared a lot of down votes if you had made your point clearly in the first place.

That doesn't even make sense. If it's because we're in a bubble, why would that stop companies from going public? It would actually help them go public.