Palantir is one of their big successes because the government has chosen to pay them for big contracts; a government who thought differently might have not only declined to do that but shut down their whole operation as fundamentally harmful to regular citizens. Likewise Uber and AirBnB built their whole business pretty knowingly on open violations of the law; a government faithfully representing its citizens' interests might easily have decided to shut that down (as e.g. the government of Japan did; both companies barely operate here). Those are just the biggest names that come to mind; I'm sure there are similar things at every level in their portfolio (e.g. not so long ago there have been stories about YC funding a malware distribution company and a company that makes illegally usurious[1] loans; at the time dang claimed pretty vigorously that YC didn't and wouldn't fund companies that do that, but the evidence that they did fund the company and the company was doing that seemed pretty irrefutable).
[1] when lending to veterans, which the company in question did
Well this is different. Palantir is a defense contractor, their biggest customer IS the government. So of course connections matter for Palantir. My question pertains more to start ups in general.
There are countless ways that government connections could be very useful if you're trying to ensure the success of portfolio companies, especially if they're operating on regulatory frontiers.
Nudging policymakers in a favorable direction on legislation that could effect your portfolio is the most obvious, but there are tons of other examples as well.
I'm not arguing that this is a primary driver of YC's success (I don't know the extent, if any, of their government influence), but you'd be silly to think that political connections can't benefit an investor.
