For years, Y Combinator has shied away from doing any kind of follow-on funding. That’s out of concern that this would signal risk and ward VCs away from supporting startups that don’t get this seal of approval.
However, under the firm’s new leadership with Sam Altman at the helm, it’s possible that Y Combinator will consider doing growth-stage investments, according to sources familiar with the firm’s plans. Both YC and Altman declined to comment on this story.
First off, the plans are very much “in flux,” a source tells us. The firm has discussed the possibility of growth-stage funding with external parties, but this is not at all finalized.
Second, it would definitely not involve any kind of Series A or B investments because of the signaling risk problem (e.g. companies that don’t get follow-on funding would have a much harder time raising funds from other investors).
A potential Y…
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