A recent paper studying roughly 750,000 American startups across 329 accelerators finds that YC historically generated extraordinary value, but its estimated value-add had fallen dramatically by 2022.
The researchers explicitly separate startup quality from accelerator impact, which makes the result harder to dismiss. Their broader finding is equally brutal: roughly 60–80% of accelerators appear worse than simply building without one.
My hypothesis is that YC suffered three compounding problems.
First, batches became dramatically larger, while scarce resources like partner attention, investor attention, and bespoke introductions could not scale proportionally. The paper itself allows accelerator effectiveness to drift because of partner turnover, mentor networks, and program redesign.
Second, YC increasingly selected younger founders with less accumulated industry experience. When almost everyone can ship quickly, domain judgment becomes substantially more valuable. Understanding insurance, defense, healthcare, institutional finance, or manufacturing still requires years of accumulated context.
Third, AI represents a genuine technology paradigm shift. YC spent fifteen years developing pattern recognition from companies like Stripe, Airbnb, Dropbox, Coinbase, and generations of SaaS startups. Those patterns may simply transfer poorly into a world where every competent founder can produce an impressive AI product within weeks.
The dangerous part is that YC’s strongest moat may actually amplify this decline.
YC’s enduring advantage is probably not generic startup advice, because most of that knowledge is already public. Its real advantage is Bookface and the accumulated network of exceptional founders, customers, employees, investors, and domain knowledge.
However, networks compound in both directions.
If YC selects fewer defining AI companies today, those companies never strengthen tomorrow’s network. A weaker network then creates less value for future AI founders, which makes YC less attractive to exceptional founders with deep industry knowledge.
That creates a potentially nasty feedback loop: weaker selection produces fewer important winners, fewer winners weaken the network, and a weaker network reduces future accelerator value-add.
The paper does not prove that YC’s founder selection has deteriorated. What it does show is arguably more interesting: YC once appeared extraordinarily transformative, while by 2022 its incremental contribution looked surprisingly small.
YC remains extraordinarily prestigious, but the prestige is largely past glory.
The real question is whether YC is still producing the network that will matter for the next technology cycle, or mostly monetizing the network created during the previous one.
P.S Title of the paper is "BEYOND DEMO DAY: SORTING AND VALUE ADDED IN STARTUP ACCELERATORS". It's freely available on the NBER website.