Y Combinator Alumnus Emphasizes Delaware C Corp for US Funding, Highlights Urgent Application Window

A prominent Y Combinator alumnus, Oleg Kostour, has underscored the critical importance of establishing a Delaware C Corporation for startups aiming to secure funding from American investors, simultaneously urging prospective applicants to act swiftly as a crucial application deadline approaches within the next ten days. Kostour, the founder and CEO of NetHunt CRM and an alumnus of YC's Winter 2018 batch, shared this insight via social media, providing a direct recommendation for aspiring entrepreneurs.

Y Combinator, a leading US seed accelerator, mandates that all companies accepted into its program incorporate as a Delaware C Corp before receiving funding. This requirement simplifies the investment process for American venture capitalists, who are accustomed to the legal framework and predictability offered by Delaware corporate law. For international startups, this typically involves forming a new Delaware C Corp subsidiary and transferring their intellectual property to the US entity.

The preference for Delaware C Corporations among US investors stems from its well-established and predictable corporate legal system. Delaware's Court of Chancery, a specialized business court, offers consistent and efficient rulings on corporate matters, reducing legal risks and streamlining due diligence for investors. This legal clarity and investor familiarity make Delaware the standard choice for venture-backed startups in the United States.

Kostour's advice also stressed the time-sensitive nature of the application process. > "YC will likely ask you to form a Delaware Corp in the US to make it simple to attain funding from American investors. But these are all details that can be figured out and negotiated later. Apply now, you have 10 days," he stated in the tweet, indicating a narrow window for submission to an upcoming Y Combinator batch. While YC reviews applications on a rolling basis, early submission is consistently encouraged to maximize acceptance chances.

His guidance provides valuable insight for global entrepreneurs navigating the complexities of US venture capital. The formation of a Delaware C Corp is not merely a formality but a strategic step that aligns with investor expectations and facilitates smoother fundraising, as confirmed by Y Combinator's own guidelines for its accepted companies.