YC's "7%" is only half the story. YC invests $500,000 as two SAFEs: $125,000 for a fixed 7% post-money, plus $375,000 on an uncapped MFN SAFE that converts at your next priced round. So your total dilution depends on that future valuation. YC's own illustrative example puts the MFN portion at 2.5% at a $15M cap. There are no fees.
If you've read that "YC takes 7%," you've read a simplification that can cost you real understanding when you sign. The actual deal is two instruments with two different mechanics, and knowing how the second one works is the difference between planning your cap table and being surprised by it. Here it is, sourced to YC's own deal page.
The two instruments
1. The $125,000 post-money SAFE: 7%, fixed. This is the part everyone quotes. In exchange for $125,000, YC gets 7% of your company on a post-money SAFE, which locks that percentage at the point of investment.ycombinator.com/deal
2. The $375,000 uncapped MFN SAFE: variable. The remaining $375,000 comes on an uncapped SAFE with a Most Favored Nation provision. "Uncapped" means it has no valuation cap of its own; the MFN provision means it converts on the best terms of your next priced funding round.ycombinator.com/deal In plain terms: that money turns into equity later, at a price set by your next round, so the higher you raise, the less of your company it represents.
YC's own illustrative example
At a $15M valuation cap, the $375,000 MFN SAFE converts into$375,000 / $15,000,000 = 2.5%of the company.
Labeled illustrative by YC. Your real number depends on your actual next round.ycombinator.com/deal
So in that one illustrative scenario, YC's total would be roughly the 7% plus 2.5%, but the honest answer to "how much equity does YC take?" is "7% fixed, plus a variable amount that depends on your next round." Anyone who gives you a single flat number is rounding away the part that actually varies.
Weighing whether that dilution is worth it?
The full sourced value against the full sourced cost, side by side.
What YC doesn't take
Two things worth stating plainly. First, no fees: YC doesn't charge companies to participate.ycombinator.com/deal Second, YC does hold pro-rata rights, meaning it can invest in your later rounds to maintain its ownership; in many cases it has put millions more into companies it backed early.ycombinator.com/deal That's an option to keep investing, not additional equity taken up front.
On finer points such as board seats or specific control rights, YC's public deal page doesn't spell those out, so this page doesn't assert them either way. Confirm the current terms in the documents you're actually asked to sign.
Module 2 · How to Pick the Right Accelerator · “Y Combinator”
The course's accelerator-programs module walks the YC deal alongside the alternatives, so you can compare what you give up and get across YC, Techstars, and Neo before you apply.
Questions to run against your own cap table
Before you sign anything, work the deal through your own numbers rather than YC's illustration. What valuation do you honestly expect at your next priced round, and what does the $375k MFN portion convert to at that price? How does the 7% fixed piece sit alongside your existing investors and option pool? If you raise higher than expected, the MFN portion shrinks as a percentage; if you raise lower, it grows. That asymmetry is the part founders most often miss, and it is why the same deal can be cheap for one company and expensive for another. Ten minutes in a spreadsheet with your own scenarios beats any generic take, including this one.
One more check worth making: whether anything beyond the two SAFEs applies to your situation. Board seats and control rights are not covered in YC's published deal page, so confirm the current terms in the documents you are actually asked to sign rather than assuming either way.
How the deal compares
YC isn't the only accelerator with a two-instrument structure. Techstars and Neo also avoid a single flat percentage. If you're choosing where to apply, YC vs Techstars vs Neo lays all three deals side by side, and what is Y Combinator covers the program the equity buys you.