Home Technology Y Combinator’s New Deal Sparks Fear in Seed Investors — The Information

Y Combinator’s New Deal Sparks Fear in Seed Investors — The Information

Y Combinator’s change to the deal terms it grants startup founders has given the famed startup accelerator more firepower than ever. And that’s causing an outcry among the seed investors who comb through its graduating classes to find the next Stripe and Airbnb.

On Monday, Y Combinator said that in addition to its usual $125,000 investment in startups in exchange for 7% equity, the organization would provide another $375,000 at a valuation determined by a company’s later investors. The arrangement, which reflects a trend in venture capital toward much bigger checks, should help founders seeking more cash upfront. It’s also a boon for YC, which will get more equity ownership in nearly 1,000 startups that graduate from its training program each year.

Source link

RELATED ARTICLES

The Information Weekend Does Wyoming, Featuring the Tech Transplant’s Guide to Cowboy Living, an Intro to Crypto’s Favorite Senator, and a Glimpse of the...

Hi, welcome to your Weekend: Special Wyoming Edition!Why devote a whole issue to Wyoming, you ask? Because the smallest state in the union has...

What Netflix Risks With Its Latest Price Hike — The Information

Netflix is raising prices—again—to as much as $20 a month. Yes, while the video-streaming pioneer may have improved a lot on the cable television...

Fewer ‘Flying Cars,’ More Focus on Revenue — The Information

“Flying cars” is a term that’s been tossed around a lot when it comes to SPACs. For detractors, it’s become shorthand for deals that...

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Most Popular

Can you legally watch the BBC and not pay the TV licence fee?

The BBC licence fee will stay at £159 annually for two years, the Government has announced.  The yearly bill will be frozen until April 2024....

BBC must fix ‘impartiality problems’, says Nadine Dorries as she confirms licence fee freeze

The BBC must address "impartiality and groupthink" problems, the Culture Secretary said as she confirmed the licence fee will be frozen for the next...

Recent Comments