I'm currently in the W22 batch. There's some heavy skepticism in this thread, so I want to add perspective from someone actually in the current batch (throwaway because we haven't announced our funding yet).
The additional $375k (+$125k OG deal = $500k) that YC is offering is an optional and uncapped SAFE. I think of this as YC being an investor in our next round, except I can receive and deploy the cash now with no premium paid to YC. This is extremely founder friendly, and is in addition to what YC had already agreed to invest in us. The terms on this SAFE are much better than what I could have negotiated on my own, and it comes with zero fundraising effort.
Because of this, I'm able to go into pitch meetings with investors around demo day in March with more leverage – I no longer need capital from them to keep the company moving in the short term. I can also make capital intensive moves I otherwise would have waited to do.
As to whether YC is a value add for us with the dilution it incurs: yes, absolutely. The valuation cap we're raising at has doubled, we have access to a great network of people and companies (this has a real and significant effect), and we were able to convince someone with the YC funding to leave their stable and well paying job to join us.
This is all in the context of a US based developer tools startup that already has a top-tier university signal (Stanford), co-founders with FAANG offers on the table, and a co-founder with years of experience working (but not as a founder) at two startups that were acquired.
I'm sure some others have better fundraising opportunities, but there is a reason many founders like myself still choose to go through YC.
The additional $375k (+$125k OG deal = $500k) that YC is offering is an optional and uncapped SAFE. I think of this as YC being an investor in our next round, except I can receive and deploy the cash now with no premium paid to YC. This is extremely founder friendly, and is in addition to what YC had already agreed to invest in us. The terms on this SAFE are much better than what I could have negotiated on my own, and it comes with zero fundraising effort.
Because of this, I'm able to go into pitch meetings with investors around demo day in March with more leverage – I no longer need capital from them to keep the company moving in the short term. I can also make capital intensive moves I otherwise would have waited to do.
As to whether YC is a value add for us with the dilution it incurs: yes, absolutely. The valuation cap we're raising at has doubled, we have access to a great network of people and companies (this has a real and significant effect), and we were able to convince someone with the YC funding to leave their stable and well paying job to join us.
This is all in the context of a US based developer tools startup that already has a top-tier university signal (Stanford), co-founders with FAANG offers on the table, and a co-founder with years of experience working (but not as a founder) at two startups that were acquired.
I'm sure some others have better fundraising opportunities, but there is a reason many founders like myself still choose to go through YC.