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:
1) this is the time of year when my inbox fills up with investors complaining about valuations of YC companies.
- Sam Altman (@sama) March 22, 20153) but there's not much we can do about market pricing--there are a lot of investors willing to pay high prices.
- Sam Altman (@sama) March 22, 20155) investors: if you don't like the price for a company, don't invest. don't berate the founder.
- Sam Altman (@sama) March 22, 20157) founder to me: "every investor says they provide more value than other investors and i should give them advisor shares. what do i do?"
- Sam Altman (@sama) March 22, 2015to make my own views clear: I would like to see less money chasing seed startups. I think it'd be better all around.
- Sam Altman (@sama) March 22, 2015I think seed prices are often disconnected from reality. I just don't think it's the fault of founders.
- Sam Altman (@sama) March 22, 2015and it will be better for good companies when seed funding heat cools off.
- Sam Altman (@sama) March 22, 2015Altman'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.