Playbook
What to do after a YC rejection in six steps
Fools.com helps founders raise a friends, family, and fools round on a Crowd SAFE.
I got rejected from YC. What should I do now?
You have four paths after a YC rejection. You can reapply for a later batch. You can try another accelerator. You can keep building on your own money. You can also raise a round on Fools from potential investors you invite.
The six steps
- 01
List your potential investors.
Add each potential investor to your pipeline with a relationship and a check band.
- 02
Set your terms.
Your round runs on a Crowd SAFE. You set the post-money valuation cap. Our cap calculator shows what a cap means for your ownership.
- 03
Launch your round.
Write your own pitch and set your target and deadline. Pledges before your Form C are nonbinding. Your company files its Form C before investors commit.
- 04
Invite your potential investors.
Send each one the link to your raise page. Your pipeline shows who you have asked and who has committed.
- 05
Close before a YC batch starts.
A round that closes before the batch starts keeps your Fools cap outside YC's MFN window.
- 06
File your annual report.
Use the money to build traction. File your Form C-AR within 120 days after your fiscal year ends.
Can I reapply to YC while raising on Fools?
Yes. You can reapply while a round is open. YC decides who it accepts. A Fools round that closes before a batch starts stays outside YC's MFN window.
How long does a Fools round take?
Plan on about 60 days. In the first 30 days you set terms, launch the round, and invite potential investors. Their pledges before your Form C are nonbinding. Your company files its Form C before investors commit. Your round closes by day 60. You set your own deadline.
What financial statements does a Fools round need?
The amount raised in 12 months sets the financial-statement tier. For $124,000 or less, the principal executive officer certifies the financial statements. The officer also certifies the company's total income, taxable income, and total tax from its federal income tax return. Above $124,000 and up to $618,000, an independent accountant reviews the statements. Above $618,000 they are audited. A company raising under Regulation Crowdfunding for the first time can use reviewed statements up to $1,235,000. If reviewed or audited statements already exist, the company provides those. 17 CFR 227.201(t) sets the tiers.
This page is not legal or investment advice. Talk to a securities lawyer before you raise.