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Are newer YC companies worth more?
Some newer YC companies have very high reported values. Here is what the figures tell founders, and why big funding stories do not describe every startup.
What founders are building · What company values tell us · Research appendix
Some newer YC companies have very high reported values. But that does not mean most newer startups are doing better. One study found that the company in the middle of the list was worth about $5 million in both the older and newer groups.
For founders, the lesson is simple: a few big funding stories are a poor guide to what you should expect for your own business.
Why the headline can be misleading
The study reports an average company value of about $48 million for the older group and $86 million for the newer group. That sounds like a big improvement.
But a few companies worth billions can push the average up, even when little changes for everyone else.
Here is another way to look at it. Line up the companies from the lowest value to the highest. Find the company halfway along each list. Its value was about $5 million in both groups.
The two comparisons answer different questions. The average reflects the very large companies too. The middle of the list helps us see whether the change reaches further down. Neither tells the whole story on its own.
There is more to the story than a few big names
When we remove the same percentage of the most valuable companies from each group, the newer group still has a higher average. More of its companies are also valued above $100 million.
So the difference cannot simply be dismissed as one or two famous successes. But the evidence is stronger for highly valued companies than for the company in the middle.
The year matters too. Companies that joined in 2024 show a much larger increase in average value than those that joined in 2023. Combining the years hides that difference.
What this means for your business
A company’s reported value is not its revenue or profit. It is an estimate of what the business is worth, often based on the price investors paid for a share of it.
A large funding round may help a competitor hire more people or spend more on sales. It does not tell you whether customers are happy, whether they keep paying or whether the company makes money serving them.
Those are better questions for planning your own business:
- Are customers paying and renewing?
- Do they use the product as part of their normal work?
- Does their payment cover what it costs to serve them?
- How much work does it take to get each new customer started?
The study also cannot tell us that adding AI makes a company more valuable. Many other things changed during these years.
Sources: September update to Ben West’s research · Detailed calculations and data checks · Download the analysis.