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Very curious to see what kind of pricing pressure this puts on seed investors who traditionally invest after YC. The dynamics seem likely to swing even more in
by Finbarr 5y ago
Very curious to see what kind of pricing pressure this puts on seed investors who traditionally invest after YC. The dynamics seem likely to swing even more in favor of founders.
- blast 5y ago> The dynamics seem likely to swing even more in favor of founders. What makes you say that?
- Finbarr 5y agoThere isn't the same pressure on founders to raise a seed round as they are likely to exit YC with significant capital and runway. Seed investors still have capital allocation targets and are likely to improve their offers to encourage founders to accept investment.
- tmcneal 5y agoThis also incentivizes founders to raise at a higher cap to minimize the dilution from the $375k. I imagine it'll be harder for investors to negotiate a lower cap or get a discount.
- Grustaf 5y agoI wouldn't call 400-500k a significant runway, but it should have some effect, since you can put of fund raising for at least a few months, maybe even 2 years if you're frugal. At that time you are hopefully further along.
- Grustaf 5y agoput *off
- colinmhayes 5y agoThey can wait longer before seeking funding. And since the terms for the 375k are based off the first funding round it makes sense to wait until the last second to minimize the percentage that goes to yc.
- amirhirsch 5y agoYea I was thinking this too. A reasonable startup is talking to other investors besides YC when they apply, so those investors will have to make up their mind before you get in or they will have to accept the same MFN note after