Does YC penalize startups with pre-YC funding?

4 pointsfuriouslol1 comment

Are YC applicants who have some funding prior to YC application disadvantaged?

Would you accept offers of angel fundings (about $100,000 in exchange for 10% equity) if you are applying for YC?

We don't discriminate against startups who've taken funding, unless the deal is so overreaching that no later stage investor would touch them. For example, we once rejected a startup whose investors had something like 90% of the stock, because a company starting out with that much stock already belonging to investors is doomed.

If you think you have a good chance of being accepted by YC and you want to take some investment now, I'd try to take it in the form of a convertible note. If the round has a fixed valuation, YC would be a "down round."

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