YC Companies · 5 min read
How Does Y Combinator Work?
Short answer
YC invests $500K in each accepted startup for 7% equity, then runs a 3-month program in San Francisco focused on shipping product and finding customers. The program ends with Demo Day, where founders pitch to ~1,500 investors. After the batch, founders keep lifetime access to YC's alumni network. YC makes money by taking equity that compounds over time as portfolio companies grow.
The full cycle
1. Application (open year-round, 4 deadlines per year).
2. Interview (10-minute Zoom or in-person with 3–4 partners).
3. Acceptance — same-day decision, usually within 4 hours.
4. Batch — 3 months in San Francisco. Weekly Tuesday dinners, weekly group office hours.
5. Demo Day — pitch to ~1,500 investors over 2 days.
6. Alumni — lifetime access to Bookface, partner office hours, and the alumni Slack.
How YC makes money
YC takes 7% of every accepted company. When a portfolio company exits (IPO or acquisition) or raises at a higher valuation, YC's stake appreciates. Its stake in Airbnb, Stripe, Coinbase, DoorDash, and Reddit alone is worth tens of billions.
What founders get beyond the money
The brand on your cap table opens every investor meeting. Bookface (the alumni network) gives access to 5,000+ founders willing to take warm intros. Group office hours provide weekly accountability and partner advice from people who've seen 4,000+ startups.
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An independent resource · Not affiliated with Y Combinator · Last updated 2026-06-01