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📝 YC Companies raising smaller rounds
Liam Gill
June 10, 2024
News of the Day
Bowery Capital general partner Loren Straub recently observed a peculiar trend among startups from the latest Y Combinator (YC) accelerator batch: many were raising $1.5 million to $2 million rounds at around a $15 million post-money valuation without seeking a lead investor. This trend, seen across several startups, limits traditional seed investors, who typically require a minimum 10% equity ownership. YC’s updated standard deal, which includes $500,000 in capital, has led to startups raising less money and aiming for smaller equity stakes. However, these companies are still seeking higher valuations compared to the broader market, where the median seed deal size is $3.1 million with a $12 million pre-money valuation. This shift reflects a more cautious approach by YC startups in response to current market conditions, but it also challenges traditional seed investment strategies, potentially impacting their ability to secure institutional support and navigate future funding rounds.
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Companies seem to have forgotten that you NEED to provide value before asking for feedback. You can't ship shitty products or just ask investors for help. You need to give something first.
— Liam Gill (@LawyerLiam)
2:00 PM • Jun 8, 2024
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