The YC standard deal

As published on Y Combinator's deal page (verify before you sign — terms can change), YC's standard investment is $500,000 on two SAFEs signed together, plus a YC agreement with participation rights.

$125,000 on a post-money SAFE for a fixed 7% of the company.
$375,000 on an uncapped MFN SAFE (Most Favored Nation).

YC also receives a pro rata / participation right to invest in later financings to maintain ownership.

Concept

A post-money SAFE sets ownership from investment ÷ post-money valuation cap up front. An uncapped MFN SAFE does not fix a cap at signing. It later adopts the best terms you give other investors in a defined window — typically the lowest valuation cap on SAFEs issued from around batch start through the next equity round.

The big idea

You are buying the batch, brand, partners and Demo Day machine with the $125k-for-7% piece. That cash-per-percent is intentionally expensive. The $375k is priced to whatever your next market clears. The analogy of "one $500k SAFE" breaks here: the two instruments behave differently when the next cap is high or low.

YC invests in US, Canada, Cayman and Singapore corporations and helps with incorporation or "flips" when needed. See incorporation.

Walking through it

YC's own illustration: next SAFEs are at a $15M post-money cap.

MFN ownership  = $375,000 / $15,000,000 = 2.5%
Fixed piece    = 7%
Combined       ≈ 9.5%

That 9.5% is before the priced round's new money and option-pool increases dilute everyone — and before the MFN matches an even lower cap if you issued one.

If instead you raise on a $30M post-money cap:

MFN ownership  = $375,000 / $30,000,000 = 1.25%
Combined       ≈ 8.25%

MFN dilution falls as the next cap rises. The 7% stays fixed.

Conversion ordering in a priced round is precise: SAFEs convert, the pool adjusts, new money comes in. YC documents that the 7% is measured after converting SAFEs in conjunction with the round, and that the priced round and pool increase dilute YC like other holders. Read the official deal page and have counsel walk your table. Stacking many SAFEs is covered in SAFE conversion math.

Common mistakes

Adding 7% + $375k as if both were capped the same way. Only the first piece is a fixed percent. The second depends on later paper.
Forgetting pro rata. YC can buy more in later rounds to hold ownership. Model that on the cap table.
Skipping counsel on conversion order. Pool top-ups and other SAFEs change what "7%" sits on.

Check yourself

Next SAFEs are at a $15M post-money cap. Roughly what does YC own from the standard deal, before priced-round dilution?

About 9.5% — 7% plus $375k / $15M = 2.5%.

Does a higher next cap help you or hurt you on the MFN piece?

It helps. MFN ownership is $375k divided by that cap, so a higher cap means a smaller percent.

Key takeaways

The published deal is $125k for 7% plus $375k uncapped MFN, totaling $500k, with pro rata — verify current terms.
MFN dilution falls as your next cap rises; the 7% is fixed.
You are paying for the program, not just the cash. Read the official waterfall with counsel.