The head of the most important startup farm in Silicon Valley thinks valuations are too high
Y Combinator head Sam Altman agrees with other recent complaints that early stage startups are often overvalued.
But he blames investors, not the founders who started those companies.
His remarks counter a Twitter rant earlier this month from Dave McClure of rival accelerator 500 startups, who criticized some founders for insisting on high valuations, then balking at terms that would protect small investors in case of an early exit.
McClure wrote "YOU might be worth a million (someday), but your pre-revenue company is not... and it def ain't worth $8-12M+ cap."
Here's what Altman said on Twitter earlier today:
Altman's opinion on seed-stage valuations is worth noting because Y Combinator is the most famous and certainly one of the most successful startup "accelerator" in Silicon Valley. Companies started there include two so-called decacorns - private companies valued above $10 billion - in Airbnb and Dropbox, plus numerous other big success stories like payments company Stripe (recently valued above $3 billion) and online game-viewing company Twitch (bought by Amazon for almost $1 billion last year).
These days, graduating from YC is pretty much a guarantee that a company will be able to raise at least a seed round. But these rounds are probably going to be expensive for investors.