Y Combinator standard deal increases to $500k

Y Combinator, a well-known Silicon Valley incubator, has raised its normal deal size to US$500,000.

The Y Combinator program, which helped launch firms such as Airbnb, Coinbase, and Dropbox, among others, is increasingly choosing African digital entrepreneurs to participate in its program.

Its alumni list includes names like Flutterwave, Paystack, and Kobo360 (not to mention Cowrywise, MarketForce, Kudi, WaystoCap, WorkPay, Healthlane, Trella, 54gene, CredPal, NALA and Breadfast).

YC previously contributed US$125,000 for 7% equity, but under its new standard offer, it will additionally invest an extra US$375,000 on an uncapped SAFE with “Most Favoured Nation” (MFN) terms.

MFN signifies that this SAFE will accept the terms of the lowest cap SAFE – or other most advantageous terms – issued between the start of the batch and the following equity round.

“To put it simply, we’re providing the company money now, but on terms that you’ll negotiate with future investors,” YC explained.

“This is the type of deal we’ve wanted to offer YC founders for years – and with the recent success of YC startups, including 10 IPOs in 2021 and more on the way this year, we’re finally able to do so.” This sum will allow founders to concentrate on founding, growing, and scaling their business. It will relieve the immediate need to acquire funds and accept less-than-ideal terms.”