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Y Combinator, the X Factor of Tech (economist.com)
universe520 writes: Since 2005 YC has taken on batches of promising founders, and this month will celebrate the funding of its 1,000th startup. Though about half of its startups have failed, which is typical of early-stage investing, it has had a head-turning record of success. In addition to Airbnb, YC has had a hand in Dropbox, a cloud-storage firm, and Stripe, a payments company. Eight of its firms have become what Valley folk call 'unicorns', valued at $1 billion or more. Combined, the companies it has invested in are worth around $65 billion (based on their most recent funding round), although YC's share is only a small fraction of that total—perhaps $1 billion-$2 billion. It is because of this record that YC has become a juggernaut in Silicon Valley.
The only reason there's so much venture capital is that interest rates are near zero and investors are willing to gamble on a better return. Once the Fed returns rates to historically normal levels, money for these dumbass startups will disappear. Same with insane real estate prices. A monthly payment on a million dollar mortgage at 3% interest is a bit over 4 grand, but at historically average rates of 8 to 10% that monthly payment will more than double.