Y Combinator, a well-known Silicon Valley incubator, has raised its normal transaction size to US $500,000.
The Y Combinator programme, which helped firms like Airbnb, Coinbase, and Dropbox get off the ground, is increasingly picking African digital entrepreneurs to participate in its programme.
Continental aristocracy such as Flutterwave, Paystack, and Kobo360 are among its graduates (not to mention Cowrywise, MarketForce, Kudi, WaystoCap, WorkPay, Healthlane, Trella, 54gene, CredPal, NALA, and Breadfast).
YC had previously invested US $125,000 for 7% equity, but as part of its new standard offer, it would now spend an additional US $375,000 in an unlimited SAFE with “Most Favoured Nation” (MFN) conditions.
“Simply put, we’re giving the company money now but at terms, you’ll negotiate with future investors,” YC said.
“This is the type of deal that we have wanted to offer YC founders for years – and with the recent success of YC companies, including 10 IPOs in 2021 and more to come this year, we are now able to do so. This sum will enable founders to focus on launching, building, and scaling their company. It will remove the immediate pressure to fundraise and accept less than favourable terms.”
MFN indicates that between the start of the batch and the next equity round, this SAFE will take on the terms of the lowest cap SAFE – or other most favourable terms – that are issued.