How We Are Using Mass Production Techniques to Venture Funding

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A venture capital fund will invest on the order of one or two million at a time. Incubator invests $20,000 and might invest in 50 or 60 startups in a year with just four partners. So 15 deals per partner, seven times the volume and 100th the amount. What's the likely success rate? You know, we don't know.

Paul Graham, essayist, programmer and partner in the y-combinator talks with EconTalk host Russ Roberts about start-ups, innovation, and creativity. Graham draws on his experience as entrepreneur and investor to discuss the current state of the start-up world and how that world has changed due to improved technology that makes it easier to start a software company. Graham talks about his unusual venture firm, the y-combinator, and how he and his partners work with start-ups to get them ready for more advanced funding. Along the way, Graham discusses why hackers are like painters and how to survive high school.