US-based seed-stage accelerator, Y Combinator (YC), is reducing the standard deal of its investment from $150,000 to $125,000. Altough it has reduced the investment amount, the equity percentage would remain the same i.e 7%, on a post-money safe
In a blog post this Friday, Y Combinator’s president Geoff Ralston said that the starting with Winter2021 batch, YC would make two changes to its terms for startups —
- Reducing Investment size from $150K to $125K ;
- Reducing the amount YC’s pro rata right to 4% of subsequent rounds. Pro–rata investment rights give an investor in a company the right to participate in a subsequent round of funding to maintain their level of percentage ownership in the company.
Originally, YC gave about $20,000 for 6% equity in a company. In 2011, Yuri Milner and SV Angel began offering an additional $150,000 to every startup in YC. We continued this program with new investors and reduced the deal to about $100k for 7%. The amount put into each company was changed to $80,000 when Start Fund was renewed. In 2014, YC increased that amount to $120k and in 2018 to $150k when it raised its last fund.
In April , Michael Seibel, CEO and a partner at Y Combinator, announced that the summer 2020 (“S20”) will be fully remote, due to the COVID-19 pandemic. This includes interviews for the batch, office hours, evening talks, and meetups throughout the batch.
Applications for the Winter 2021 batch are now open at https://www.ycombinator.com/apply/ .