Over $5 billion jump in valuation in one month, even though none of their highest valued investments has yet had an exit? At this rate, Sam’s startup club may start putting Facebook to shame

Despite funding many hundreds of startups, Y Combinator’s physical operation is still absolutely microscopic, yet they are just one blockbuster exit away from a growth capability whose impact has the likelihood of shaking the world’s innovation investment establishment to its core.

I sometimes get the feeling that if the financial nightmare of 2008 returned and the world went back into an even more tumultuous tailspin, there would still be one operation that would somehow manage to expand relentlessly.

Not because YC might somehow have accumulated such an enormous amount of capital that they would still be able to afford to grow in the face of such a whirlwind, no, there’s no reason to expect that anyone’s stash, no matter how large, would be guaranteed to allow them to thrive and grow if the markets ever found themselves plumbing those kinds of depths once more.

But the point is that Y Combinator has proven conclusively over their nine year existence that they wouldn’t really ever need much more than a pittance (or just a meager supply of ramen) to carry on doing even more of what they are doing now, even if just about everything else was in free fall.

To say that YC is parsimonious would be an understatement of epic proportions.

It’s not just that they only offer a few tens of thousands of dollars to each startup that is accepted into their program (despite the fact that ‘graduating’ YC startups each end up attracting an average of over $3m in funding from angels and VCs after Demo Day).

YC’s infrastructure/valuation ratio makes WhatsApp’s famous 55 employee operation that supports the best part of half a billion users look hilariously overstaffed.

Just think about that fact for a moment as you consider whether an unreserved preparedness on the part of Facebook to pay $19 billion for such a recently established and diminutive team has any bearing upon the future valuation of a burgeoning YC, who seem to be actively redefining the very meaning of of the term ‘lean startup’, both in terms of the startups that they fund, as well as the scale and astonishing leanness of their own operation, even in this new age of ‘the incredible shrinking blockbuster’.

The question we all ought to be asking Sam right now, is precisely how YC is planning to spend their first massive exit cash-out on growing their operation.

Altman, in a TV interview a few days ago, shocked Bloomberg‘s Emily Chang with the jaw-dropping news that that Paul Graham’s $14+ billion January valuation had just risen to $20 billion in the intervening few days since Paul’s tweet.

Here’s Sam, in my mind unequivocally illustrating his YC management suitability six years ago, as he advises startups on fundraising (much, if not all of this talk is still surprisingly relevant today).

In this next video, you can see Sam in his YC partner role, helping Paul Graham systematically grill startups in ‘Office Hours’.

The partners unsurprisingly don’t get to grill more than a handful of the YC applicants on stage in front of a large live audience, but the interviews are nonetheless 100% realistic in every other sense.

Proof of this is that one of the teams being grilled in this video is actually given acceptance by Paul into the latest YC batch (to the founders’ utter delight, jubilation and understandable amazement) live on stage, as a result (and I think you’ll probably agree with that verdict if you watch the interview) of the answers that they give in the interview!

The partner’s job in these interviews is all about coming up with incisive and revealing questions (often on the fly) that the other partner hasn’t thought of asking during the few minutes that a YC applicant’s interview lasts (there are thousands of startups that apply to each batch and hundreds are interviewed over a period of a few weeks, no wonder Paul wants Sam to take over after doing that twice a year since 2005).

Here’s Sam on the other side of the innovation investment evaluation process: he’s giving a pitch

Here’s Paul being interviewed by Jason Calacanis a few days ago, where the subject of YC’s future comes up and Paul talks about Sam taking the helm at YC: