from Hacker News

Is Y Combinator worth it by numbers?

by Mikho on 4/9/23, 8:51 PM with 8 comments

  • by robocat on 4/9/23, 11:26 PM

    YC also has a 4% participation right https://www.ycombinator.com/deal/

    Include that and founder ownership drops by 4 percentage points in scenario A.

    Also AFAIK the option pool is usually 10% post-money, so the founder would get a few percent less than calculated in the examples (10% pre-money).

  • by Mikho on 4/11/23, 2:24 PM

    For those who want to crunch numbers here is the Excel file I created for the comparison with all the scenarios and valuations:

    https://link.babich.me/ycdeal

  • by Mikho on 4/9/23, 8:51 PM

    I crunched some numbers to model different scenarios and different start-up valuations to compare whether the YC deal is any good and what the other options are. In general, thinking about the 7% of the Safe and whether it's worth it is the wrong mental model to start with. It’s like announcing winners and losers in a race immediately after the start and before anybody even runs half a distance. The thing is 7% Safe is just Step 1 in a priced round when YC’s shares convert — and there are 3 steps that depend on the priced round valuation and share a new VC gets. Anyway, I modeled 3 scenarios with 7 different start-up valuations of the priced round for each to compare founders' shares as a result.