Has Y Combinator’s new deal changed the early-stage investing game? – TechCrunch

Y Combinator’s brand new Planning to invest more capital for beginners in the fast-paced program is more controversial than many initially thought.

By raising the so-called “standard agreement” to include $ 375,000, the US Program and Investment Team may have materialized the initial investment of hundreds of companies in each fast-track sector. Professional start-up investors around the world can see their offers fall short, and perhaps the youngest beginners in Y Combinator can change how they interact with foreign capital.

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Prior to the change, Y Combinator offered $ 125,000 to accelerated participants. The new $ 375,000 SAFE, now part of YC Standard Trading, is uncovered – meaning the dollar will not be converted to an automatic percentage of the company in question.

With today’s tens of thousands of mega-rounds – nine-digit checks that seem to touch every hour of the day – and the huge Unicorn troop waiting for a private outing, an additional $ 375,000 may not seem like a big deal.

But early investors are paying attention. according to Mike Asem |, Partner on Midwest-based M25 Venture Capital Shop, the new words help Y Combinator, but for the team and the founders themselves come with “competition”.

Naturally, Assem is talking about his own book, but it is important to note that investors around the world are not happy with the change.

Y Y Combinator may have voluntarily changed the initial start-up investment game? Or does it give the portfolio companies more time to reach their next level of maturity? Given the large number of checks that Y Combinator writes and the weight it carries around the world, there may not be a more important first question this year.

We ask investors and founders to consider the matter. Notes follow from Ashem; Pejaman Nozad Of Pear VC; Iris Choi Of Flood gate; Nathan is funny Of Magma partners; Siggi Simonarson, Co-founder BuildBuddyParticipated in the 2020 Y Combinator class: And Torben Frehe, Co-founder WingbackPart of the Winter 2022 YC Bach.

We will examine the impact that the new agreement will have on startup founders, both experienced and inexperienced. We will also discuss what the new trading agreement means for Y Combinator, whether the change is outdated and what negative effects it could have on different investment levels around the world. let go!

How will the new YC formal agreement affect the founders?

Extra capital is more capital, and some founders benefit greatly from the new Standard Y Combinator agreement.

Floyd Choi – Probably the only favorite guest On the Equity Podcast “Pre-Dedication” to the Beginner Series A “Unveiled Safe Note” is probably a more confident voice for the founders, especially those who may have decided to part ways with YC in the future, “he told The Exchange. So compared to “founders who have no problem growing up.”

Magma Lusti was very fond of new contracts for a specific set of companies: “The new deal would be good for Latin American companies that are very old, no mobile and no US network. Their extra money will benefit them.

The same investor. He wrote Beginners who show “not hot”, “unpredictable founder” or who want to shape their own way only on the back of income may be the winners of the new contracts.

Things are still looking good – the new contracts could help beginners boost, especially with companies that do not have a Stanford network or near South Park in San Francisco.

Founder’s Perspective

We’ll be back to investors soon, but let’s hear from some of the founders involved in Y Combinator.

BuildBuddy’s Simonarson called the new words “very exciting” because “the founders could be more useful.” how so? According to Simon Arserson, under the previous investment agreement, “there is a lot of pressure on the team to raise money or make it run out.

“Now the founders can wait until they get a tug. [or] Income [or] User parameters that will enable them to grow in good condition. ” In the case of BuildBuddy, Simonerson said the company would have retained the money if it had reached a similar agreement. [his company] It’s been more than two years. ”

“The terms of the new agreement are” good news for the whole world, “said Winsack, a SaaS launcher. [Y Combinator Winter 2022] Group, especially companies that have not previously raised capital.

Wingbak did not need the capital, Frihe said. . ”