Ask YC: When Y Combinator receives equity, when does it start diluting?

5 pointsphil_KartMe15y ago3 comments

We've been offered a term sheet from a startup accelerator.

I think the terms state that their position will continue to adjust, and not be diluted, until just AFTER we raise a round greater than $250K.

Is this typical of accelerators? For example, does Y-Combinator continue to hold its full 2-10% investment just after a $1M round is raised?

3 comments

YC takes common stock. They suffer dilution the same as the founders.

Thanks. Has this been true every year?

Yes.

j / k navigate · click thread line to collapse

5 pointsphil_KartMe15y ago3 comments

We've been offered a term sheet from a startup accelerator.

I think the terms state that their position will continue to adjust, and not be diluted, until just AFTER we raise a round greater than $250K.

Is this typical of accelerators? For example, does Y-Combinator continue to hold its full 2-10% investment just after a $1M round is raised?

YC takes common stock. They suffer dilution the same as the founders.

Thanks. Has this been true every year?

Yes.

j / k navigate · click thread line to collapse