Late last night the 43 startups in the most recent Y Combinator class got quite a surprise. Start Fund, a new fund created by DST’s Yuri Milner as an individual and SV Angel, offered each of the companies a $150,000 investment in the form of a convertible note with no cap and no discount.
Most of these companies are still in stealth mode, and Start Fund hasn’t seen them. They made the offer based on the Y Combinator stamp of approval.
The startups are jumping on board. 36 of the 43 startups in the class had signed the paperwork to take the loan before the event was even over last night, says David Lee, a managing partner at SV Angel who’s also managing the Start Fund. “As of 3 pm today we’ve received 39 confirmed signature pages, and we believe the rest are awaiting approval from their attorneys.”
Lee also says this isn’t a gift, it’s an investment. He says “These aren’t gifts, we’re not a charity. It’s an investment that gives these startups that first critical $150k that gets them to product. We intend to make money on these investments.”
He added – “This is a chance for us to invest in some of the best young entrepreneurs in the world.”
The funds will be wired to startups in the next few days, says Lee.
