From YouTube to $12M: French VC Funds Y Combinator Startups

Navigating the competitive venture capital landscape requires a clear and disciplined investment strategy, a principle perfectly embodied by Gabriel Jarrosson, a French engineer who transitioned from creating YouTube content to managing a multi-million dollar fund. His firm, Lobster Capital, operates under a remarkably straightforward rule: it invests exclusively in companies that have graduated from the Y Combinator accelerator program. This focused approach has propelled Jarrosson from producing online investment tutorials to overseeing more than $12 million in assets, with a second, larger fund already in development according to recent regulatory filings.

Jarrosson’s conviction stems from a belief in Y Combinator’s proven ability to cultivate billion-dollar enterprises, a track record he considers superior to scouting startups through other channels. His journey into the investment world began in 2017, driven by frustration over limited access to promising French startups. He started a YouTube channel to document his experiences, which unexpectedly grew into one of Europe’s most significant angel syndicates. Since 2020, this syndicate has channeled $36 million into startups, the vast majority being YC alumni. This success directly led to the establishment of Lobster Capital, whose inaugural fund closed at $12 million, exceeding its initial $8 million goal.

The logic behind this exclusive YC focus is rooted in probability and performance data. Reports indicate that approximately 4.5% of Y Combinator companies achieve unicorn status, a rate that outpaces the 2.5% seen in other venture-backed seed-stage startups. Furthermore, around 45% of YC companies successfully secure Series A funding, compared to an industry average of 33%. The accelerator has also been the launchpad for more than 90 unicorns, with a significant portion evolving into decacorns. For Jarrosson, these compelling statistics justify paying a premium for YC deals, where seed-stage valuations are often substantially higher than those of non-YC counterparts.

He explains his perspective by focusing on the potential for monumental returns. “When you analyze the math of venture capital, these outcomes are tremendously beneficial for a portfolio. The essential question for any investor is whether a company has the potential to become the next unicorn,” Jarrosson noted. “If the answer is affirmative, investing at a elevated valuation, be it $20 million, $30 million, or even $40 million, can be a sound decision. Some investors may decline at those levels, but I choose to proceed.”

Lobster Capital has adeptly capitalized on the artificial intelligence boom, with AI-centric startups featuring prominently in recent Y Combinator cohorts. Jarrosson observes that three consecutive batches have broken internal revenue growth records, with companies rapidly scaling to millions in annual recurring revenue. While some industry reports suggest this early ARR can be unstable, sometimes inflated by pilot programs or contracts with high churn rates, Jarrosson acknowledges the risk but maintains that generating initial revenue is the most significant challenge. He believes retention issues can often be resolved over time.

A critical challenge for any fund following this strategy is securing access to the most sought-after YC companies, as demo days attract a flood of competing investors. Jarrosson attributes his competitive edge to his standing within the YC network, the visibility gained from his content creation, and his own background as a founder. Y Combinator founders evaluate investors on Bookface, the accelerator’s internal platform, and Jarrosson credits his positive ratings with helping him secure investment allocations. His podcast, which interviews YC founders, and his substantial LinkedIn following, where he shares insights about the YC ecosystem, function as continuous marketing tools.

“I strive to be a valuable partner to founders,” Jarrosson said. “Many learn about our firm through social media, and because I have founder experience myself, they trust that I can provide practical help, which isn’t always the case with funds run by people who haven’t been operators.” He is part of a growing trend of investors leveraging personal brands to build their funds, citing figures like Harry Stebbings of the 20VC podcast and Garry Tan, a co-founder of Initialized Capital who now leads Y Combinator, as inspirations. For Jarrosson, social media, YouTube, and podcasting are not just for community building but are essential engines for generating deal flow. This content-driven approach also attracts limited partners, who often discover him through his online presence before ever reviewing a formal fund presentation.

Through his syndicate and Lobster Capital’s first fund, launched in 2023, Jarrosson has made over 100 investments. The fund has backed nearly 30 startups operating in B2B SaaS, fintech infrastructure, and AI tools. His portfolio already includes two unicorns and several promising “soonicorns,” such as Jeeves, Baubap, Flutterflow, Metriport, Alinea, and Jiga.

“Y Combinator has an established, long-term track record spanning more than two decades. It consistently identifies and develops the most talented founders,” Jarrosson stated. “One could argue that YC’s future results might be even more impressive. But even if they merely maintain their current success rate, we know it represents a very strong investment bet.” While investing solely in YC-backed companies is not a novel concept, with other firms like Initialized, Pioneer Fund, Phosphor Capital, and Rebel Fund employing similar strategies, Jarrosson has uniquely combined this focus with a powerful personal brand to carve out his own distinct path.

(Source: TechCrunch)