Background
Regarded as the most well-known and successful startup accelerator, Y Combinator is an organization focused on helping early-stage companies achieve rapid growth through a combination of funding and structured mentorship (learn how it got its name).
Many companies that would later become household names and change the way we live today got their start at Y Combinator or “YC,” including Airbnb, Reddit, DoorDash, and more (see the full list).
The accelerator has funded more than 5,000 startups, which it claims are now worth more than a combined $800B. Over 90 of those startups now have valuations of $1B or greater, and at least 11 were publicly traded, as of August 2025.
As many as 90% of startups fail on average—but Y Combinator startups only have about a 20% failure rate. Some argue that these portfolio companies may achieve higher valuations due in part to the brand recognition and subsequent investor access stemming from the association with the program.
History
Paul Graham, Jessica Livingston, Robert Morris, and Trevor Blackwell cofounded Y Combinator in 2005 in an effort to create a new, more efficient, and standardized model for seed funding (see 101).
Graham, Morris, and Blackwell had previously cofounded a technology startup called Viaweb that sold to Yahoo in 1998 (Livingston had been dating—and later married—Graham).
Graham’s professor’s husband, Julian Weber, provided $10K in seed funding to Viaweb in its early days in exchange for 10% of the company. Weber continued to work directly with Viaweb’s cofounders, helping them get set up for success as a company from a legal and business perspective. At the time, this hands-on model for seed investors wasn’t standard, though Y Combinator’s success mimicking Weber’s approach arguably popularized it down the line.
With a $200K combined initial investment funded by some of the cofounders, the YC team launched a Cambridge summer program for undergraduate startup founders. They invested roughly $10K-$20K into each startup in exchange for 6% ownership.
Although they didn’t plan to profit from that first cohort, the model was a success: Both Reddit and OpenAI’s cofounders were part of the first-ever Y Combinator “batch” (graphic via LinkedIn) back in 2005.
Sam Altman is now known as the CEO of OpenAI, but he brought the company Loopt to that first batch—and later served as Y Combinator president himself.
The team soon decided to do another batch, this time in California. Y Combinator hosted two cohorts a year with one in each location until 2009, when they moved all of their operations to California.
How It Works
Today, Y Combinator has four three-month cohorts or “batches” per year that take place on its San Francisco campus, with about 100 startups in each.
As of 2025, each startup receives $500K worth of funding. In exchange, Y Combinator gets 7% ownership of each company, as well as an incremental equity amount that’s fixed when raising money from other investors. Learn about the structure of the standard Y Combinator deal here.
During each batch, founders receive one-on-one and group mentorship from YC partners, access to an internal social networking platform, the opportunity to hear from successful alumni, and more. Find out exactly what happens during each three-month program, from the “batch kickoff” to “demo days.”
The accelerator has a highly selective application process and a roughly 1% acceptance rate, with thousands of startups from across the globe applying to each batch.
Focus on AI
In 2025, the program increased its number of batches from two to four per year, partly due to AI-driven startup acceleration. Many of the startups accepted to Y Combinator in recent years have been in the AI industry: 87% of the startups in the Fall 2025 batch were AI companies.
The accelerator’s philosophies around best practices for building startups also continue to impact the broader startup community, such as Paul Graham’s “Founder Mode” essay that went viral in 2024.
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