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?
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.
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.)
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[ 2.7 ms ] story [ 16.2 ms ] threadFor 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.
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.)