clevy

8 ms·

1.
by clevy 5y ago
YC legal team here: first, we agree that if you have legal counsel, you should get their advice on how to handle. Second, other startups have had this happen to them and it's typically easily resolvable. The first line of the safe stat
2.
by clevy 9y ago
It's fine that you aren't incorporated yet, and I'm glad you waited! Many applicants have not formed a legal entity when they apply. If you are accepted in the S17 batch, we will help you incorporate in the US.
3.
by clevy 11y ago
I will miss you so much Garry!
4.
by clevy 12y ago
Y Combinator purchases common stock - approximately 6%. Y Combinator has a fund, called YCVC Fund I, that purchases a safe equal to 1% of the company (at the time of issuance of the safe). The safe is typically convertible into shares of
5.
by clevy 12y ago
We look for great founders and great ideas, regardless of geography. BUT...if you get accepted, your company will have to convert into a US domestic corporation (preferably Delaware). So forming your entity now in Europe or North America
6.
by clevy 13y ago
Re question 1: you read correctly. An investor just get its money back in a change of control. An investor using this form of safe would have to be very confident that the safe would be amended to match a later safe with better terms. To
7.
by clevy 13y ago
The SAFE Preferred Stock would be whatever you end up calling it in the charter - for example, Series AA (just something to differentiate it from the preferred stock being issued to the new money investors). So no, you would not actually c
8.
by clevy 13y ago
Sorry, DenisM. Investors in the Silicon Valley find notes very acceptable. It is not only YC companies that raise early money on notes, many other companies do too. Notes may be the most popular in SV, but I am sure that investors in oth
9.
by clevy 13y ago
I think with this idea you end up back at the note concept; what you are proposing sounds more like a loan / debt to me (if I understand you correctly?). The purpose of the safe, anyway, is to turn investors into stockholders at some
10.
by clevy 13y ago
The notes have proliferated because they are quick and easy (no transaction costs, etc.) so it's the way many startups like to raise money. Priced rounds are fine too - they just tend to take more time and involve costs. YC and other
11.
by clevy 13y ago
This is a high class problem to have! As mentioned above, this seemed to us to be an extreme corner case. To remain simple, we tried not to draft for every scenario (which was hard, believe me - lawyers do this by nature). It may require
12.
by clevy 13y ago
A company that never has one of the qualifying events is likely to be an extreme corner case. So an investor could end up holding a safe for a while, but for the vast majority of companies, there will be a financing or a merger / acqu
13.
by clevy 13y ago
Correct - the notes had this feature too, except that rather than shadow preferred, it was the preferred / common "unit" concept. The net result was the same.
14.
by clevy 13y ago
Great question. Re: the implied valuation of the company, I don't believe it will be different from the notes. The safe will convert to preferred stock, and while the price of the preferred stock certainly affects the price of the co