Ycombinator Saas Agreement
But it wasn`t just Demo Day that helped us raise money. Compared to fundraising in Europe, the Bay Area process is extremely efficient and favourable to the founders. Pre-Series A investments are usually made through a standardized, simple agreement called SAFE, which is 5 pages long. The company receives an investment in exchange for granting the investor rights to future equity in the company similar to a share warrant. There are no lengthy investor negotiations on investment terms and no expensive lawyers or notaries who need to be involved. The agreement is signed electronically via the online platform Clerky. In practice, this means that the time of an investor who says «yes, I want to invest» to get the money in the bank can be as short as 2 days. This can be critical to the success of your business if you consider that you can work faster and continue to build the team and the product. Demo Day is the grand finale at the end of the program, where the founders present their companies to the most prestigious investors in Silicon Valley. By being exposed to all these investors at the same time, it creates an urgency for investors to move quickly if they want to finance the best companies. Please stay in the Bay Area for the duration of the 11-week program.
There is no better place to be at the creation of a technology company. They are surrounded by so many successful entrepreneurs and startups. Most successful technology companies in the world are based in Silicon Valley or are headquartered. It`s really inspiring to see how fast things move in the bay area. Our updated safes are post-money safes. By «post-money» we say that the safe owner is measured by post, all the safe money is accounted for – which is now his own trick – but before (before) the new money in the price cycle that transforms and dilutes the coffers (normally series A, but sometimes the Seed series). The post-money safe has what we think is a great advantage for founders and investors – the ability to calculate immediately and exactly how much property the company has been sold. For the founders, it is essential to understand how much dilution is caused by each chest they sell, just as it is fair for investors to know how much they have bought ownership of the business. Using this form generates a huge amount of friction in a standard, small business that you just don`t need. During the YC program organizes weekly dinners with all the founders of the office. Each time, they organize a successful YC-Alum that speaks and shares its experience at the event. In our case, speakers like Mathilde Collin – founder of Front (whom I admire very personally!), Peter Reinhardt – founder of Segment, Patrick Collison – founders of Stripe, Solomon Hykes – founders of Docker and Kyle Vogt – were the founders of Cruise, among others.
It`s really inspiring when they share their journey, important discoveries and stay after the session to answer your questions one by one. What for? It was written by a lawyer for a big law company who almost certainly did not support a high-speed sales team. And that`s why it`s far too long, complicated and accountable. It will create endless redlines, phone calls and will be forwarded by your prospects and clients «to our lawyer to take a look.» It doesn`t matter to large companies-ish deal. But it will be a major obstacle to selling in smaller, more transactional sales. In fact, if your interested sends a 3k agreement to legally check… Legal can be so busy, it is never checked.