Is selling 8% of your company for $125K insane?
Yea, a bit.
Nichole set off a bit of a storm on X with this one, but we have data that says she's probably right.
Note - this is actually not about YC, whose deal is more like $500K for 8% or so once it's all said and done. This is about the wide swath of smaller, less brand-name accelerators.
Some of those deals are...well, just not amazing for founders.
Data below shows expected dilution (from SAFE fundraises) depending on the amount raised. To raise $1M, you'll sell on median ~10% of the company.
So 8% for $125K is indeed quite steep.
But hey, if you need the cash and it's the only way through, onwards 🙏
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