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| Format: | Preprint |
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2025
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| Online Access: | https://arxiv.org/abs/2512.13755 |
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| _version_ | 1866917148246409216 |
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| author | Adl, Rommin |
| author_facet | Adl, Rommin |
| contents | While founder backgrounds account for less than 4% of funding variation among Y Combinator startups, this suggests that other factors, such as industry trends and product innovation, may play a more significant role in funding outcomes. Using data on 4,323 YC companies from 2005-2024 merged with S&P Global funding data, I estimate OLS regressions with batch year fixed effects on a regression sample of 2,113 companies. The coefficient on prior FAANG work experience is -0.251, indicating approximately 22% less funding. However, this result is not robust, as it changes direction in further analyses, suggesting that FAANG experience may not be a reliable predictor of funding. The most robust finding is that startups within Y Combinator that consist of larger founding teams tend to raise more funding, with each additional co-founder associated with approximately 21% more capital raised. While observable credentials such as prior FAANG work experience and top-tier education explain minimal variation in funding, the size of the founding team emerges as a more consistent predictor, highlighting the importance of team dynamics in securing capital. Unobserved factors like industry and product quality likely dominate funding decisions within this elite accelerator cohort. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2512_13755 |
| institution | arXiv |
| publishDate | 2025 |
| record_format | arxiv |
| spellingShingle | Founder Backgrounds and Startup Funding: Evidence from Y Combinator Adl, Rommin General Economics Economics While founder backgrounds account for less than 4% of funding variation among Y Combinator startups, this suggests that other factors, such as industry trends and product innovation, may play a more significant role in funding outcomes. Using data on 4,323 YC companies from 2005-2024 merged with S&P Global funding data, I estimate OLS regressions with batch year fixed effects on a regression sample of 2,113 companies. The coefficient on prior FAANG work experience is -0.251, indicating approximately 22% less funding. However, this result is not robust, as it changes direction in further analyses, suggesting that FAANG experience may not be a reliable predictor of funding. The most robust finding is that startups within Y Combinator that consist of larger founding teams tend to raise more funding, with each additional co-founder associated with approximately 21% more capital raised. While observable credentials such as prior FAANG work experience and top-tier education explain minimal variation in funding, the size of the founding team emerges as a more consistent predictor, highlighting the importance of team dynamics in securing capital. Unobserved factors like industry and product quality likely dominate funding decisions within this elite accelerator cohort. |
| title | Founder Backgrounds and Startup Funding: Evidence from Y Combinator |
| topic | General Economics Economics |
| url | https://arxiv.org/abs/2512.13755 |