Zaid Loves Vitamin Water

June 30, 2009

My cousin Yusuf

Stay foolish. Stay hungry. -Steve Jobs

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May 28, 2009

What if Obama gave Y-Combinator 40 Billion Dollars

I just came across this headline: Government to swap $40B for GM stock

This got me thinking about a super hypothetical: what if Y-Combinator got 40B?

First a few assumptions...

First off, let's take out 25% for running Y-Combinator. This leaves $30B of cash to dole out.
Let's say the average invested per startup is $25,000. Let's add another $25,000 for paperwork. So per startup, $50,000 will be spent
YC has funded 118 startups in total. They employ 198 people not counting the founders. Per invested startup, 1.7 new job is created. (198/118)

Now for some numbers...

600,000 new startups
the number of startups that can be funded.
(total money - admin cost) / cost per startup = ($40B - $10B) / $50,000
1,020,000 people
employed by the startups.
avg. # of employees x total startups = 1.7 x 600,000
125,000 people
# of people employed by GM.

This is all hypothetical.
Nevertheless, this should help show the ridiculous nature of pumping in 40B in a failed corporation to bail out a few hundred thousand employees temporarily. There ought to be a better way to bring food to the tables of GM factory workers than delaying the death of their jobs.

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May 21, 2009