Last year, out of 50,000+ applications,
Y Combinator funded just 450 startups.
That is less than 1% acceptance rate, being one of the top most competitive incubators. Y Combinator (YC) is highly selective because its entire model depends on backing a small number of exceptional, fast-moving founders. To maintain the quality of mentorship, protect its strong global reputation.
YC keeps the bar extremely high and selects only the teams showing rare potential, execution speed, and clarity of insight.
Round 1
Can you guess if the startup was funded by YC?
Oxygen
Oxygen is a fintech company, offering business banking focused on businesses. Currently, oxygen is on the verge of shutting down.
Yes funded
No funding
GoCardLess
GoCardless is a fintech company building a global bank payment network enabling direct payments for businesses.
Yes funded
No funding
YC portfolio
YC invests in multiple similar companies
Over the years, Y Combinator has invested in 14 companies in the payment gateway niche. Stripe leads globally, with Razorpay a close second. The same applies to the travel sector, with Airbnb leading the segment, followed by Let's Do It.
14
Payment gateway
8
Travel
Strategy
So, what is the secret?
Now we know that Y Combinator funds multiple startups with nearly identical ideas. It seems wasteful. Confusing. At first glance, it seems like a mistake—or at least inefficient. But what if there's business to it.
To understand this, let's look at 5 companies Y Combinator invested in the ‘payment gateway’ space.
Wepay
Lotuspay
Stripe
Magic
Bridgecard
YC’s invests
$120K each
5 companies · 2-7% equity
Bridgecard
fails as they could not attain product-market fit
-$
0K
MAGIC
fails as they ran out of their runway
-$
0K
STRIPE
becomes a unicorn!
+$
0.0B
YC’s investment
~$
1.900B
in total
WEPAY
gets acquired by JPMorgan Chase
-$120K
+$
0M
LOTUSPAY
gets acquired by Juspay
-$120K
+$
120K
What looks like redundancy is actually the only rational strategy in a hits-driven business. YC knows that most investments will fail or return modest multiples. They're not trying to avoid failure but they're trying to ensure they're in the room when exponential success happens.
You don't need five wins. You need one Stripe, one Airbnb, one DoorDash. That single outlier will generate returns that make every loss, every write-off, every failed bet completely irrelevant.
That's why YC bets on similar ideas, back competing startups, and invest in spaces that look crowded. They're not hoping lightning strikes. They're buying enough lottery tickets to guarantee they're holding the winning number.
CEO, Gary Tan says
Investing in founders rather than companies
Tan points out that the best founders don’t treat their startup as a fixed concept but as a constant experiment. YC’s job, therefore, isn’t to predict which idea will work—it’s to back the people who will find the idea that works. That’s why YC’s track record isn’t defined by perfect ideas, but by resilient, adaptable founders who turn iterations into success stories.
Inside the founder's mindset
What are the YC founders actually like?
Across hundreds of YC interviews, a consistent founder mindset appears. These aren’t just good builders, they’re people who think long-term, stay close to users, move quickly, and constantly unlearn habits that slow them down. YC repeatedly selects for this pattern because it tends to produce founders who can survive early chaos and still make something people want.
100 customers who love you
yanking out requirements
Values & Personality
Hardship & Challenges
Growth & Strategy
technical founders
conflict avoidance
have to unlearn
lifestyle inflation
frugality, focus, obsession and love
seek truth
dropping-out
founder mode
plan at the start
team first
strong culture
enterprise sales
hiring is culture
shotgun wedding
build in public
action bias
product-market fit
loneliness of founder
data informed
make something people want
design partners
optimists
infinite learner
organic growth
talking to customers early
customer obsessed
pivot
we’ll figure it out
product so good people tell friends
international expansion
action bias
FAANG trap
cockroaches
certainly get a co-founder
loss aversion
skill match vs trust
sensible business model
write it down
government relations
lean vs fat startups
losing control
first version doesn't work
network effects
one yes vs one no
build character
awkward conversation
fire and hire
long-term vision
stressful times
what do you want to build?
pruning the tree
intuitive
went out of business
game recognized game
The themes above show up again and again: focus, frugality, intuition, conflict avoidance, growth instincts, action bias, and the ability to push through stress. Founders talk openly about loneliness, failed first versions, awkward conversations, lifestyle inflation, and the challenge of staying in control.
On the growth side, they prioritize customer love, product-market fit, strong culture, and small early teams that move fast. Whether it’s pruning features, hiring deliberately, or designing with users in mind, YC founders share a playbook built on resilience, clarity, and relentless iteration.
Data deep dive
Mapping founder backgrounds
gender
- 81.65%
- 18.35%
schools
- 22.62%
- 17.98%
- 14.46%
field
- 59.59%
- 9.35%
- 8.18%
work
- 36.37%
- 34.59%
- 15.48%
Most common path to be a YC founder
A significant proportion of YC founders hail from computer science and engineering (CSE) backgrounds, frequently emerging from prestigious institutions such as Stanford, MIT, and other leading universities. Many of them also bring experience from major technology firms, having honed their skills at companies like Google, Facebook, or Microsoft before embarking on their entrepreneurial journeys.
Alternatives
YC is not the only option
YC is one of the best-known startup accelerators, but it’s not the only path. Founders can scale through alternative accelerators like Techstars, 500 Global and Antler.
Each specialising in different strengths such as mentorship, early cofounder formation, growth support, or enterprise partnerships. The right choice depends on your stage, geography, and go-to-market needs, not just brand recognition.
Part 2: Analysis on Techstars, coming soon!
Credits
Info design by Rakshit Keswani and Madhurima Chatterjee
Website created by Rakshit Keswani and Madhurima Chatterjee
Written by Rakshit Keswani and Madhurima Chatterjee
Project advised by Karen Cheng
Rakshit Keswani and Madhurima Chatterjee are Human-Computer Interaction + Design students at the University of Washington, Seattle.
Data sources
Videos from YouTube.com