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

#1

Post by phil_KartMe » Sat, Mar 26, 2011, 1:49 PM UTC

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?

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

#2

Post by staunch » Sat, Mar 26, 2011, 3:46 PM UTC

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

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

#3

Post by [deleted] » Sat, Mar 26, 2011, 4:36 PM UTC

staunch wrote: post #2

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

[deleted]

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

#4

Post by phil_KartMe » Sat, Mar 26, 2011, 4:36 PM UTC

staunch wrote: post #2

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

Thanks. Has this been true every year?

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

#5

Post by staunch » Sat, Mar 26, 2011, 8:30 PM UTC

phil_KartMe wrote: post #4

staunch wrote: post #2

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

Thanks. Has this been true every year?

Yes.