Before You Accept a YC Startup Offer, Run This 5-Step Equity Check
A startup badge can make an offer feel bigger than the cap table; here is the five-step check to run before signing.
The trap: a badge is not a cap table
When a job post highlights a startup's external validation, your brain hears that it is credible, and that is the trap. The badge tells you the company has a label, not how many shares you will own after the early investor converts, the option pool grows, and your grant is written.
CollectWise describes itself as a Y Combinator-backed startup, and its job post leans on a fast-moving story: generative AI automating debt collection in a $35B US market, AI agents outperforming human collectors by 2X at lower cost, a $3M annualized revenue run rate reached in just over a year, and a Founding Customer Success Engineer hire to help reach $10M+ over the next year.
The role is described as hands-on and spanning customer success, engineering, and operations.
The rule: model the cap table before the title impresses you
The rule is simple: do not accept a percentage until you know which denominator it sits on. Employee equity is a claim on a future company, and the denominator changes when money comes in and when the company reserves shares for future hires.
Think of the cap table as a whiteboard. On one side are the founders and early investors. On the other side is the option pool, the reserved share pool for future employees. Your grant is not a promise that it will stay the same size; it is a slice of whatever total exists when you sign, and later when you vest.
What the cap table is really telling you
A cap table is not a secret; it is a map. It shows who owns the company before your offer, what the early investor will own after conversion, and how much room the company has left for future employees. If the founders are generous, they will not mind showing you the shape of that map. If they are vague, they may be protecting a number that would make your offer look smaller.
The option pool is the part candidates underestimate. It is not a bonus pool; it is a reserve. When a company expands it, the total number of shares increases. If your grant is expressed as a percentage of the old total, your percentage can fall even though your share count stays the same. That is why the pool history matters more than the headline percentage.
The five-step check
- Ask for the pre- and post-conversion cap table. If the company will not show you the structure, that is information. You need to know whether your percentage is being measured before the early investor converts or after.
- Confirm the SAFE terms. A SAFE is a short-form investment note that can convert into equity later. Ask whether it is a post-money instrument, what its conversion terms are, and whether it includes most-favored-nations protection. Plain English: if another investor gets a better conversion term, the early investor may be able to match it.
- Ask about the option pool. Ask whether the option pool was expanded before your grant. If the pool grows after your percentage is set, your slice can shrink even if your share count does not.
- Calculate your grant as shares granted divided by post-conversion, post-pool total shares. Do not use the founder count, the pre-conversion count, or the number in the offer letter if you are unsure which denominator it uses.
- If the offer states a percentage, ask whether it is pre- or post-conversion. A pre-conversion number can become smaller after dilution and pool expansion. The difference may not change your day-to-day job, but it changes what you are actually buying.
Red flags that should slow you down
- The offer states a percentage but not the denominator.
- The company will not confirm whether the option pool was expanded before your grant.
- The SAFE terms are described as “standard” without any written confirmation.
- The founder talks about the badge, the revenue, and the mission, but not the cap table.
What to do before you sign
Do not let the revenue story replace the equity math. A company can be growing quickly and still have a cap table that makes your offer smaller than it sounds. Ask for the cap table, the SAFE terms, and the option-pool history. Then write the percentage you actually own on a whiteboard, next to the total shares, not next to the badge.
If the company is serious about your role, it should be able to answer these questions in plain English. You do not need to be a lawyer to ask. You do need to know whether you are buying a meaningful slice of the company or a flattering number that will shrink before you vest.
