We all love to whine about YC valuations. But lately, YC has quietly become one of the best deals for investors…

Getting More for Your Money

When I was meeting YC companies 2-3 years ago, this is what the best ones looked like:

• $100k ARR
• $20-25M valuation (200x to 250x ARR)

Here’s what I’m seeing now in the top startups:

• $1-3M ARR
• $30-40M valuation (10-40x ARR)

The price is up a little. But traction has exploded, and revenue mutliple has dropped around 90%.

Why I’m Looking More Closely at YC

You’re paying a little more, but getting a lot more in return. This makes investing in YC a better value than it’s ever been.

I’ve made a bet in each of the last two batches. Given the stronger value proposition, I’m going to be looking at future batches more closely.

When I Can’t Make the Numbers Work

There are still two types of deals I avoid, whether from YC or anywhere else:

• < $200k ARR, $25-40M valuation (too early)
• White hot startups raising at $200-500M valuations (not enough upside)

Angel investing is a business of outliers. So naturally, there are exceptions: a startup building in an area I’m obsessed with, or a founder with an incredible track record.

Why Are These Startup Growing So Fast?

How the heck have startups gone from $100K ARR to millions in the same short program? 

You guessed it: AI.

The best startups are using agents to recruit a team, build a product, and find customers at warp speed. 

Wrap-Up

“Long ago, Ben Graham taught me that ‘Price is what you pay; value is what you get.’ Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.” – Warren Buffett

I love a good bargain. And I’m starting to find them where I’d least expect: the world’s top accelerator.

If you’re investing and you’ve stepped away from YC due to valuations, I encourage you to take another look. 

And if you’re in YC and you’re building something amazing, shoot me a message! I’d love to hear about it. 

DMs open. 

More on tech: 

I Left $157,000 on the Table: How I Missed a Great Investment

38 Words Got This Founder on My Calendar — Here’s the Cold Email Formula That Wins

Meet My Latest Investment: Perfectly

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