

Ask HN: Does Y Combinator participate in A and beyond rounds? - tedjdziuba

I have always been curious if YCombinator participates in Series A rounds to keep their pro-rata, or do they eat the dilution? Any YC founders willing to say?
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pg
No, we get diluted like the founders.

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photon_off
This is far from a definitive answer, but I haven't heard of YCombinator
investing in any Series A rounds. Dilution is part of the game, and is
generally a good thing. Further investment generally boosts the value of a
company making YC and any previous investors' investments already a win... on
paper at least.

For a list of most, if not all, the companies YC has invested in take a look
here: <http://www.crunchbase.com/company/y-combinator> and see if you can find
any that aren't listed as "Angel" investments.

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joshu
prorata shares of later rounds are important for two reasons 1) a vc's LPs
want them to get and maintain a certain percentage of ownership and 2) down
rounds are very painful from a dilution pov so the prorata really helps there

if you're only interested in absolute return, then dilution doesn't matter,
only the value increase.

not that you asked, but as an angel myself i generally don't take my prorata -
the startups that aren't doing that well, i don't want it, and the ones that
are doing very well, i can't afford. also, the risk tradeoff (do i want to
invest a marginal dollar in a new startup or to invest it in another startup?
i want to intelligently maximize risk, i think.)

