[maximp]

I'm also confused about how this works. If you choose to never raise after YC, is the remaining $375K just part of of the 7% they take upfront, or is it only available if you raise?

> Simply put, we’re giving the company money now but at terms you’ll negotiate with future investors.

[mritchie712]

You get the 375k now, it is not part of the 7%. The incremental % they own wouldn't be determined until you raise again.

But you could choose to never raise again. They'd still own some incremental amount of your company, but % would be a bit unclear unless you got a formal valuation outside of raising or sold the company.

[SmellTheGlove]

If you can build something with 500k and grow at VC-expected multiples without raising again, I'm sure that'd be a pretty positive conversation to go have with YC to determine the equity attached to that additional 375k!

I think the issue is going to be that YC isn't looking to fund lifestyle businesses, so getting that initial shot is going to be tough. It just doesn't seem to me like YC is looking for companies that wouldn't have that next equity round.

I've never gone through YC though, so don't necessarily take my word for it!

[tptacek]

They would own the 7%, and have a debt claim in the amount of the SAFE on the company at liquidation.