Y Combinator has once again revised its standard deal terms, this time to add Canada back as one of its permitted sites of investment.
The accelerator’s standard deal terms webpage was changed at some point between November and January to remove Canada as a supported country, which would have forced Canadian founders to reincorporate their startups in the United States, the Cayman Islands, or Singapore to participate. The initial change was first reported by The Logic last week.
The change sent shockwaves through the Canadian tech community. Some balked at the perceived affront, while others argued that Canadian startups had already been redomiciling in the US for years, particularly as a way to attract or appease US investors.
John Ruffolo, the Maverix Private Equity co-founder, Council of Canadian Innovators vice-chair, and prominent tech investor, told BetaKit in an interview last week that the change sent “the absolute wrong message—that’s not substantiated with fact—to leave Canada.”
On Thursday afternoon, Y Combinator posted on X that it decided to add Canada back to its list of accepted countries of incorporation. Upon hearing the news that Y Combinator had reversed its decision, Ruffolo told BetaKit, “I guess being a fucking pain works.”
The entirety of a short blog post from Y Combinator CEO Garry Tan on adding Canada back can be found below.
“Going forward, YC will once again invest in US, Canada, Cayman, and Singapore corporations.
We previously decided to remove Canada from this list because we noticed that our top-performing Canadian companies reincorporated in the US. This is likely because incorporating in the US gives companies easier access to investor capital at Demo Day. But we don’t want to suggest that we no longer fund Canadian startups or Canadian founders. In fact, we invest in dozens of Canadian startups each year and have hundreds of Canadian founders in our alumni network, including one of YC’s founders, Trevor Blackwell.
If you’re a Canadian founder, we welcome you to apply to YC.”
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Feature image courtesy of Paul Miller, licensed under CC BY 2.0.