YC Series A Program Investor Access(blog.ycombinator.com)
blog.ycombinator.com
YC Series A Program Investor Access
https://blog.ycombinator.com/yc-series-a-program-investor-access/
9 comments
Ugh - only deep pocketed individuals or investment funds can apply. For a second thought they had opened it up FundersClub/Wefunder style where any random person could take part. (Or at least accredited investor)
The goal here is to reach investors that can lead series As.
Doing that requires a fair amount of capital given that:
a) the average A last year was $8m and b) the lead is expected to write a check for the majority of the round.
I think that seed rounds are generally a better fit for the types of funds you mentioned. It's possible that these funds will develop over time to be able to lead As. I look forward to that happening and having them participate in YCA.
a) the average A last year was $8m and b) the lead is expected to write a check for the majority of the round.
I think that seed rounds are generally a better fit for the types of funds you mentioned. It's possible that these funds will develop over time to be able to lead As. I look forward to that happening and having them participate in YCA.
>the lead is expected to write a check for the majority of the round
Is that true?
In the sample numbers given in the form [https://docs.google.com/forms/d/e/1FAIpQLSeT0G1nuYWUn71cV36o...], the lead doesn't have the majority:
Yappy, Total: $20M, Our check: $8M, Yes
Is that true?
In the sample numbers given in the form [https://docs.google.com/forms/d/e/1FAIpQLSeT0G1nuYWUn71cV36o...], the lead doesn't have the majority:
Yappy, Total: $20M, Our check: $8M, Yes
Out of curiosity: on a $8m round, how much is expected for the lead to invest?
I would guess ~$2m, but you gave the impression that it would be more about $5m.
I would guess ~$2m, but you gave the impression that it would be more about $5m.
VCs are expected by their LPs to get 15-25% ownership. So there is no way for an investor to invest $2m on an $8m round and get to that level of ownership.
Leads will take as much of the round as they can. This is usually at least 51% but often much more.
Worth mentioning that given the current cheap money, a lot of the investment is leveraged, on credit or timed. So you don't have to have 2m sitting idle in a bank to lead a round.
As far as I understand VCs(General Partners) don't hold investment money. They just get paid fees and have a mandate from Limit Partners to invest, so when they want to invest, they just call on LPs to transfer the money.
I imagine each VC fund has a multitude of LPs and they each manage cash based on their own strategies. The key is that they have enough liquid assets to meet the obligations in a timely manner.
Obviously, each fund is set up separately and might have a different structure.
I imagine each VC fund has a multitude of LPs and they each manage cash based on their own strategies. The key is that they have enough liquid assets to meet the obligations in a timely manner.
Obviously, each fund is set up separately and might have a different structure.