Y Combinator Increases Standard Deal Size to $500,000 for Startups

Y Combinator Increases Standard Deal Size to $500,000 for Startups

The foremost tech accelerator program, Y Combinator has announced an increment to $500,000 in funds to invest in participating startups. The Silicon Valley tech accelerator will now offer an additional $375,000 in the form of an uncapped simple agreement for future equity (SAFE) note from the traditional $125,000 at a 7% equity stake.

This deal helps startups that participate in the YC accelerator program to shift focus to launching, building, and scaling the company, rather than for fundraising. YC President, Geoff Ralston made the announcement via a blog post. He added that the increment eliminates the pressure to fundraise and unfavorable terms.

“The $375,00 is on an uncapped safe with “Most Favored Nation” (MFN) terms. MFN means that this safe will take on the terms of the lowest cap safe (or most favorable terms) that is issued between the start of the batch and the next equity round. Simply put, we’re giving the company money now but at terms you’ll negotiate with future investors.”

The President stated that he has wanted to offer this deal to founders for years. The recent graduates of the YC program would be the first beneficiaries. He also envisions that this change would encourage more startups to apply to the YC accelerator program in the coming years.

Nigerian IdentityPass and Ethiopian BeU delivery have confirmed their participation in the YC Winter 22 Batch that will hold this January.

Other African startups that have joined the Y Combinator Winter and Summer Batch include Flutterwave, Paystack, Kobo360, KudiBank, Cowrywise, 54Gene, Amenli, and ShipBlu among others.

Meanwhile, Y Combinator is currently accepting applications from startups for the Summer 2022 funding cycle. It will take place from June–August 2022. Due to the COVID-19 pandemic, the batch will be remote.

If you are a Startup founder and would like to apply, please submit your application online by 8 pm PT on March 24.