Seed Accelerator, Y Combinator To Invest $500,000 In Batch Startups

United State based Seed accelerator, Y Combinator has announced that it will invest $500,000 in batch startups to provide participating companies with more cash.

The fund which is in two folds will see the company channel the first Y Combinator equity deal worth $125,000, for 7% of accelerated startups which translates to roughly a $1.79 million post-money valuation while the remaining $375,000 will be channelled to uncapped Simple Agreement for Future Equity, SAFE note based on nations that are most favoured.

While the ‘most favoured nation’s language ensures that Y Combinator gets as good a deal as anyone else in a later conversion, being uncapped would ensure that there is no defined maximum price at which the $375,000 SAFE will convert to shares.

Y Combinator president,Geoff Ralston in a blog post said that the fund will be made available upfront to focus on building their companies, rather than fundraising.

"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.”

The startup market offered terms of $20,000 for 6% when it was first launched more than a decade ago. However, the expansion it experience now allows for more participanting startups from other countries and markets.