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Comment by timavr | Hacker News Reader

The problem here is that everyone will know if YC will follow up or not during the process.

Investing is game of information. If an investor can’t figure out who else will be on the cap table, they have much bigger problem.

The way it is going to go down is that investor during meeting will ask if founders think YC is in that round. If founders say something along the lines of YC decides after term sheet, it basically means no.

In the end , the overall result is that less YC companies will raise, but the good once still will, but it was always the case.

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If they are only taking pro rata, it has to be post term sheet. No reason why YC would commit early.

> If founders say something along the lines of YC decides after term sheet, it basically means no.

Why would it basically mean no? It seems like the new policy makes the answer "Maybe, and there's no way to find out until a lead investor has signed on the dotted line".

If you think highly of YC's investment prowess signing on a deal and then watching them bow out is a red flag.

That would be the biggest challenge I would think. When ever I've been involved in funding rounds the investors are always trying to eek out every possible bit of signalling they can.

Well now every rational investor must reduce the value of YC's brand being attached to a company. If YC only invests in X% of YC companies, there must be some Y% discount to the YC brand as a whole, no?

If there's a 100% chance YC takes their pro rata stake, then the YC brand is more valuable.

YC partners doing a lot of introduction during the fundraising process.

It puts them in a tough spot. If YC partner writes to an investor, this company is awesome, plz invest and then investor asks if YC is going to invest?

And they get back, you commit first and then we decide, it just doesn't look/sound good.

It is important to remember is that a lot of companies in YC batch fundraise on SAFE, so when a priced round comes along probably 90% of them are not even in a position to fundraise, because a product didn't work out, team issues etc.

Also, there is YC Series A program which basically is going to be the sign of approval for investors and I am pretty sure YC is going to follow in 100% of cases for that one.

If they just do that for everyone and get a reputation for sticking to writing back that they wont decide until you've committed though, that would mitigate the signal

As an investor, if YC contacts me with a "great investment opportunity" and does not invest themselves even tho I know they could have, the investment better be successful. Because otherwise, I will feel cheated on. "Do as I say, not as I do" type of relationship is not exactly what I am looking for.

In the previous system, they had skin in the game, they literally were putting money where their mouth was: same companies, same valuation. If I make money they make money, if I lose money, so do they. You can't beat that.

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