After Demo Day

Demo Day takes one day. The round takes weeks, and for some companies, months. How much do YC companies raise after Demo Day, and at what price? How does the round come together? And which small check during the batch costs the founders more than it seems? This lesson answers the three questions.

Nobody publishes the official numbers

YC does not publish a median round size or a median valuation for its companies. The numbers in this lesson come from investors, trackers, and the press. Each number is the view of one source, and the sources do not always agree. Use the numbers as a range, not as the price of your company.

The sources give a rough picture. In 2025 and 2026, most YC rounds after Demo Day were approximately $2M to $5M on post-money SAFEs. Caps were approximately $15M to $25M in 2025, and approximately $40M for the W26 “default” round. A few companies raised at more than $100M. For history, Michael Seibel of YC wrote in 2018 that YC companies raised at “$6.5m-$18m valuations.”

The “default” rounds changed a lot from W23 to W26. Before you read on, calculate what they sold.

Predict first

The W26 "default" round was $4M of SAFEs on a $40M post-money cap. What part of the company did those SAFEs buy?

Type a guess before you continue. A guess first, even a wrong one, makes the answer easier to remember.

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Compare with the market

Outside YC, most first rounds are much smaller. Carta collects data from the US startups that use its software. Carta counts all the SAFEs at the same cap as one round.

The $40M cap of a W26 “default” round is a little more than the Q2 2026 median cap of $35M for SAFE rounds of $2.5M or more. Most founders outside YC raise far less on their first round. YC companies raise at the large end of the pre-seed market.

How the round comes together

The meetings and the commitments come in the weeks near Demo Day. YC stays close after the event: “In the weeks following Demo Day we keep in close touch with the startups as they negotiate the fundraising maze.” YC also writes that its partners frequently speak to the investors themselves, to learn what the investors really think about a startup.

Brad Flora of YC told the story of one YC company, Freshpaint, in a 2023 talk. Freshpaint met 160 investors. 39 of them invested, for a total of $1.6M, over 4 months and 18 days. Flora said that real fundraising “is just a bunch of one-on-one meetings on Zoom, over and over again.” It is not a show like Shark Tank.

Yes rate      = Investors who invested ÷ Investors met
              = 39 ÷ 160
              = 24.4%

Average check = $1,600,000 ÷ 39
              = $41,026

Work it out

Northwind expects the same yes rate as Freshpaint, 39 of 160. It wants 20 investors in its round. Approximately how many investors must it meet?

Your answerCheck

Paul Graham gives two rules for this part of the round. First: “You should always talk to investors in parallel rather than serially.” Second: “accept offers greedily.” SAFEs make the two rules possible. Each investor signs a separate SAFE, so the company can do a rolling close, one investor at a time. The lessons on the pipeline and meetings to a term sheet show the process in full.

Michael Seibel of YC adds a warning: “A financing round is not a milestone. It is literally cash.” The goal of the round is the money and the time that it buys, not the headline.

How much to sell

YC partners give rules of thumb for the part of the company that a round sells:

• Geoff Ralston, in YC’s guide to seed fundraising: “most rounds will require up to 20% dilution and you should try to avoid more than 25%.”
• Paul Graham, in 2013: do not sell more than 25% in the seed round, and keep the accelerator stage at less than 15%.

YC’s deal and a “default” round fit in these limits. YC takes approximately 8% to 9% at the next cap, and a “default” round sells 10%. Together, they sell approximately 18% to 19% before the first priced round.

Graham also wrote that the most important thing to understand about valuation is that it is not that important. A very high cap sets a high bar. The next investors must agree to an even higher price, or the next round looks like a step down. The lesson on how valuations are set shows how the price comes from the money and the percentage.

The MFN trap

Before Demo Day, a friendly angel offers a small check: $100K on a SAFE with a $10M cap. It looks harmless. $100K ÷ $10M is only 1% of the company. But YC’s MFN SAFE takes the lowest cap of the SAFEs that you sign after the MFN start date. If the angel signs during the batch, YC’s $375K also converts at the $10M cap.

Worked example · step 1 of 5

One $100K SAFE during the batch

1. 1

   Start with the plan

   Northwind is the company from the YC deal lesson: 9,000,000 founder shares and a 1,000,000-share pool. After Demo Day, it raises $3M at a $30M cap. Then a Series A raises $12M at a $48M pre-money valuation, with a 10% pool. With no angel, the founders end with 56.09%.

Show step 2Show all steps

The angel’s own shares cost the founders 0.75 points. The change to YC’s MFN SAFE costs them 1.86 points more, more than twice as much. Move the angel’s check and cap. Then compare a SAFE that the angel signs before the batch with one that the angel signs during the batch.

Simulator

The MFN trap: one small SAFE during the batch

After Demo Day, Northwind raises $3M on SAFEs at a $30M post-money cap. Then a Series A raises $12M at a $48M pre-money valuation, with a 10% pool. Before that, an angel offers a small SAFE.

The angel's check

$100K

The angel's post-money cap

$10M

No angel SAFE

56.09%

Founders, after the Series A

Signed before the batch

55.34%

−0.75 points

Signed during the batch

53.48%

−2.61 points

What the angel's SAFE costs the founders

Signed before the batch

0.75 points

Signed during the batch

2.61 points

Signed before the batch, the angel's $100K SAFE costs the founders 0.75 points. Signed during the batch, it costs 2.61 points.

The difference is YC's MFN SAFE. It takes the lowest cap of the SAFEs that come after the batch starts. So the $375K converts at the angel's $10M cap, not at $30M, and grows from 1.25% to 3.75% when the SAFEs convert. After the Series A, YC owns 8.16%, not 6.29%.

Work it out

During the batch, Northwind signs $200K on a SAFE at an $8M post-money cap. After Demo Day, it signs $2M at a $25M cap. What does YC's MFN SAFE convert into?

Your answerCheck

Quiz · question 1 of 6

Test what you learned

In week 4 of the batch, you sign $100K with an angel at a $10M cap. After Demo Day, you raise $3M at a $30M cap. What happens to YC's MFN SAFE?

• AIt converts at the average of the two caps
• BIt converts at the $10M cap, the lowest cap after the MFN start date
• CYC cancels it, because you took money from a different investor
• DIt converts at the $30M cap, because the $3M round is larger