Ask PG: Do you get companies wanting to acquire Y Combinator itself?

https://news.ycombinator.com/item?id=3193641

by badclient • 15 years ago

78 27 15 years ago

news.ycombinator.com

And how do you typically respond?

pg3• 15 years ago

No; investment firms don't get acquired.

tzm• 15 years ago

What about portfolio positions?

alain940402• 15 years ago

Didn't Sequoia invest in Y Combinator, $8.25M in 2010 (http://techcrunch.com/2010/05/21/y-combinator-closes-new-8-2...)? I guess you can argue that LPs it's not quite the same as a direct investment.

IdeaVentura2• 15 years ago

Sequoia isn't a Limited Partner of YC, it's a Limited Partner in one of several funds in which YC is the General (Managing) Partner; I presume.

cperciva• 15 years ago

Is it fair to call YC an investment firm? I've always thought of YC as being an incubator which dabbles in investing -- in the sense of creating wealth primarily via mentoring rather than the initial startup-picking process -- rather than as an investment firm which dabbles in incubation.

I'd be very interested to hear your opinion on the relative importance of the various roles YC plays.

badclient• 15 years ago

Fair enough. What if a PE group made you an insanely crazy monetary offer for majority stake?

te_platt• 15 years ago

Do you mean that sort of thing just isn't done? Or there are legal/other reasons why it can't be done?

alain940402• 15 years ago

YC is likely in the same situation as a famous Hollywood studio: you can buy the buildings and the logo, but once the people leave, the value is gone. So there is nothing worth acquiring.

pg3• 15 years ago

I meant mainly that it isn't done. I'm not sure if there would be legal obstacles as well. E.g. we're not a C Corp, but a collection of LLCs.

SureTheyDo4• 15 years ago

Investment firms get acquired all the time. There's nothing any less acquirable about an organization that deploys a pile of capital into third-party companies to produce return than any other type of company. Sometimes investment firms even sell chunks of themselves to the public, like BlackRock or Berkshire Hathaway (which is a slightly different story, and a different structure, but not in the important senses)

Hell, giant BHCs are investment firms, they just focus on very different opportunities (sovereign debt, insured mortgage bonds, etc.) and they have a different regulatory regime and funding source (deposits, short-term debt finance)

Man Group plc is a large acquirer of investment firms and stakes in investment firms.

If you broaden the definition of "investment firms" slightly (from the top down an insurance company looks an awful lot like an investment firm with a strange 'cost of float' funding source), then they get acquired all the time. E.g. everything Sanford Weil has done in his life.

pg3• 15 years ago

By investment firms I meant VC funds and the like. I've never heard of a VC fund being acquired. (About 10 years ago a fund of Ron Conway's was acquired, but I believe it was fully invested then. I.e. the acquirer was buying a portfolio, not a business.)

hr• 15 years ago

This statement is bait.

TamDenholm• 15 years ago

An alternative question: Does Y Combinator ever consider fully acquiring one of its companies? Surely there must be a few companies directly relevant to your business that you could acquire?

Zak• 15 years ago

YC has hired and/or made partners of founders of companies it invested in. That seems more in line with its goals than buying companies.

pitdesi• 15 years ago

PG said a couple of days ago "I never considered what I'd do if someone wanted to buy YC, because companies like YC aren't buyable. But even if someone wanted to buy it I could not imagine selling it, because I don't need the money and it wouldn't be worth the risk that the acquirer would ruin it."

http://news.ycombinator.com/item?id=3178173

Ask PG: Do you get companies wanting to acquire Y Combinator itself?

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