There was a recent, er, exchange of words between that grandaddy of accelerators, Y Combinator, or rather CEO Garry Tan, and Ari Partovi, founder and CEO of relative upstart accelerator, Neo. During a keynote he gave at HackMIT, in “his 15-minute speech, Partovi says he mentioned YC once, saying: “The mentor ratio: we have as many mentors as Y Combinator, except they’re serving 20 startups rather than 250 startup,” TechCrunch reported.

“The comment seemingly infuriated (Tan), who took to X… to write: “Competition is good. What isn’t OK is when competitors like Neo slander Y Combinator by saying ‘YC does not offer personalized advice’… YC has 12 group partners including me: When we fund you you get 1:1 advice for the life of your startup.”

Boys, boys, boys!

Tan’s are fightin’ words – and Partovi’s, from Tan’s point of view, possibly tortuous, in the legal sense. Or, as the TechCrunch headline put it, Why is Y Combinator so defensive lately?

There’s a good question and as the article itself states, “Y Combinator was founded in 2005 and has since funded at least 4,000 startups with a combined valuation of $600 billion, according to its website. Among those funded startups are Airbnb, Coinbase, Cruise, DoorDash, Dropbox, Instacart, PagerDuty, Reddit, Stripe, Zepto and Twitch.”

(We are aware of the Instacart $10B IPO, but as Yahoo!Finance reported, the valuation is down significantly from its peak of $39 billion in early 2021.)

Meanwhile, “Since its 2017 inception, Neo has funded 175 companies valued at over $33 billion.”

Which means that Neo might have something of a strongly competitive track record. Time will tell and tick-tick-tick, YC?

“A recent article on TechCrunch…entitled ‘Here’s why some investors are sitting out of YC Demo Day,’ quoted a venture capitalist that claimed that YC Demo Day was no longer useful for pre-seed and seed investors because “at this point, most of the companies are already funded,” but, said the article, “some of the lore surrounding Demo Day — and YC in general — has faded in recent years. Some investors don’t like that the cohorts have gotten larger and less selective, while others think the base valuations and round sizes have become too inflated.”

Or it could be d) all of the above.

Many people believe that there’s no such thing as bad press, and this contretemps between Tam and Partovi certainly raised the latter’s – and Neo’s – profile, so how did Tam and YC possibly benefit?

Although there is such a thing as bad press. Case in point, Juicero, a Silicon Valley juicer startup that raised $120M from investors and was widely ridiculed after Bloomberg News reported that users could easily squeeze the packets with their hands and turn the contents into juice faster  than could the $400 cold-press juicer machine.

Which Is the Best Accelerator?

That aside, as Anand Sanwal of CB Insights pointed out, The best accelerator in the world not called Y Combinator. It’s the Thiel Foundation, which isn’t even an accelerator, and doesn’t take equity. Quel dommage, considering that “There are 11 companies with valuations/market caps over $1B, or 7.7% of the nearly 150 Thiel Fellowship recipients on CB Insights to date – including Vitalik Buterin, co-creator, Etherium. Many others are valued in the hundreds of millions.”

Still, YC’s success rate is high. According to Pitchbook, Y Combinator leads accelerators in unicorn-creation rate. “An estimated 4.5% of the startups that have gone through Y Combinator since 2010 have become billion-dollar companies.”

But, noted one commenter on a Reddit thread, “Neo terms are wayyy more attractive, and I do think YC has fallen off quite a bit from a brand perspective, especially within SF.”

Its enviable track record to date aside, Y Combinator might be resting on its laurels and somewhat blind to the current tech investment climate, given that “the base valuations and round sizes have become too inflated,” as investors told TechCrunch. Just because one is first, doesn’t mean that they’ll stay Number One forever.  Case in point: what happened to Go To Meeting and other video conferencing platforms once the lockdowns hit and, like Google, Zoom became something of a verb. Tan’s defensiveness might be a result of YC not quite being the jewel in the crown it once was, but Why See that… Onward and forward.