Viewing profile — clevy

YC legal team here: first, we agree that if you have legal counsel, you should get their advice on how to handle. Second, other startups have had this happen to them and it's typic…

It's fine that you aren't incorporated yet, and I'm glad you waited! Many applicants have not formed a legal entity when they apply. If you are accepted in the S17 batch, we will h…

I will miss you so much Garry!

Y Combinator purchases common stock - approximately 6%. Y Combinator has a fund, called YCVC Fund I, that purchases a safe equal to 1% of the company (at the time of issuance of th…

We look for great founders and great ideas, regardless of geography. BUT...if you get accepted, your company will have to convert into a US domestic corporation (preferably Delawar…

Re question 1: you read correctly. An investor just get its money back in a change of control. An investor using this form of safe would have to be very confident that the safe wou…

The SAFE Preferred Stock would be whatever you end up calling it in the charter - for example, Series AA (just something to differentiate it from the preferred stock being issued t…

Sorry, DenisM. Investors in the Silicon Valley find notes very acceptable. It is not only YC companies that raise early money on notes, many other companies do too. Notes may be th…

I think with this idea you end up back at the note concept; what you are proposing sounds more like a loan / debt to me (if I understand you correctly?). The purpose of the safe, a…

The notes have proliferated because they are quick and easy (no transaction costs, etc.) so it's the way many startups like to raise money. Priced rounds are fine too - they just t…

This is a high class problem to have! As mentioned above, this seemed to us to be an extreme corner case. To remain simple, we tried not to draft for every scenario (which was hard…

A company that never has one of the qualifying events is likely to be an extreme corner case. So an investor could end up holding a safe for a while, but for the vast majority of c…

Correct - the notes had this feature too, except that rather than shadow preferred, it was the preferred / common "unit" concept. The net result was the same.

Great question. Re: the implied valuation of the company, I don't believe it will be different from the notes. The safe will convert to preferred stock, and while the price of the …