Carolynn Levy
Managing Director, Legal, Y Combinator. On 1 show, 4 appearances. The Shows tab opens the full record on each.
executiveoperatorhostotherycombinator.com ↗
She is the creator of the SAFE (Simple Agreement for Future Equity), an open-source financing document drafted at Y Combinator that became an industry standard. A longtime corporate lawyer and YC executive, she also co-hosts The Social Radars podcast with Jessica Livingston.
1shows
4appearances
25statements
7resolved
7supported
0contradicted
100%fully supported
1said about them ↓ Everything Carolynn Levy said on any show that made the record, most notable first. Each card names its show and opens the statement there.
Levy: Tacking on unfamiliar co-founders is more damaging than going solo
“It's such a better idea for founders to just try and if they don't have a co-founder to just do it themselves. It will be very hard, but it is the damage that can be done by tacking on a co-founder that you haven't worked with, that you don't know very well, t…”
Levy: Founders should split equity equally rather than reward the original idea
“Do not place too much importance on the founder that had the idea for the business, because all of the hard work is in front of the team, and all of the value is going to be created in the future. If you are all going to be working hard going forward, which yo…”
Levy: Startups should avoid formal employment agreements
“Employment agreements are actually are not actually appropriate for startups because employment is at will by default, and the basics of hiring and firing are governed by law anyway. In fact, employment agreements can sometimes complicate things because courts…”
Levy: Trademark registration is a nice-to-have early on, not essential
“Generally we consider trademark registration to be something that can wait. It's a nice to have, not a need to have in the early days of your startup.”
Levy: Co-founder equity should default to equal rather than reward past work
“I think a mistake that founders make is that they come to the equity discussion, and they're only looking backwards. They're thinking about who had the idea, and who worked the longest on it at the beginning, and who has the MBA, and who's going to be CEO, and…”
Levy: Founder equity disputes often signal underlying trust or commitment issues
“If you and your co-founders are having a really hard time coming to a consensus about stock allocation, there may be underlying trust or commitment issues with the team, so you want to pay close attention to that.”
Levy: Founders not paying themselves violates labor law but goes unenforced
“Strictly speaking, it's against the law not to pay yourselves although obviously this isn't a thing that That gets enforced.”
Levy: Having non-founders work for free creates major legal risks
“It's one thing for founders to work for free, but it's significantly riskier for non-founders creating work product and other intellectual property to work for no compensation.”
Levy: Investors avoid funding founders who lack stock vesting
“No investor wants to put money into a company with founders who may decide the next day that they're burned out, so they take their shares and they leave.”
Levy: Founders must read every line of their stock purchase agreement
“You can get away with not reading every word of your bylaws, for example, but you need to understand every provision in your founder stock purchase agreement.”
Levy: Startups should never fight trademark lawsuits or overpay for domain names
“It is a bad decision to waste time getting into a lawsuit with a company that claims you stole its trademark, and it is usually also a bad decision to spend a ton of money on a domain.”
Levy: Use convertible notes over SAFEs if prior investors used notes
“A time when you may not want to use the safe is if you are looking at a company that has already issued convertible promissory notes to earlier investors, and if that's the case, you're going to want to go ahead and just use that same note, not use the safe, a…”
Levy: Investors should not use SAFEs for lifestyle businesses
“If you want to fund lifestyle companies, You definitely do not want to use the safe, because then you're going to have this problem all the time.”
Levy: Angel Investors Waste Time Negotiating Downside Protection
“If you believe in the power law and you invest that way, excuse me, then what you're not going to do is waste time negotiating downside protection, because what you've realized is that eking out a one and a half X return
On all these little investments is not …”
Levy: Startup Founders Usually Do Not Want Angels on Their Board
“Sometimes angels think that they need to ask to be on the board of directors in order to be officially helpful, and you don't, and please don't, because it's actually not something the founders probably want. Sometimes, I mean, there's exceptions, but usually …”
Levy: Founders breach contracts if they ignore SAFE pro rata rights
“This is a contractual right. You're breaching the contract if you do not give the safe holders their pro rata right.”
Levy: Most public companies and investor requirements make Delaware standard
“Most public companies are Delaware companies, so that saves you a little time if you're gonna go public. And some investors actually will require that you're in Delaware before they, before they'll fund you.”
Levy: Basic incorporation platforms cause founders to forget to buy their stock
“One of the reasons why we think, ah, Clerky and Stripe Atlas are so great is because they don't stop after formation. They also have post incorporation documents, and some of the not so good platforms stop after formation, and they don't do post incorporation,…”
Levy: Delaware franchise tax is minor for startups when calculated correctly
“If your startup is a Delaware corporation, there is an annual tax you have to pay to that state, but if you calculate it correctly, the tax owed is really minor for startups.”
Levy: The vast majority of angels and VCs will not fund LLCs
“The vast majority of angels and VC firms will not invest in an LLC.”
Levy: SAFEs are not debt, accrue no interest, and lack maturity dates
“One of the most important things, I say this a lot, the safe is not a loan. It is not debt. It does not accrue interest. There is no right to be repaid at some point in the future at some maturity date. So please don't call it a safe note.”
Levy: Startup dissolutions rarely leave enough money to repay investors
“In a dissolution situation, not only is there never any money for stockholders, but there's rarely enough to pay back investors either.”
Levy: Startups no longer need PPMs for SAFEs or priced rounds
“You don't even need a PPM these days to do a priced round. Nobody, nobody really does those anymore. SAFE is just one document. That's all you need. For a priced round, it's usually just a term sheet.”
The other half of the tape: Carolynn Levy's own voice is left out of every number here. 1 statement on the record names them. every mention, with the transcript →
Statements about Carolynn Levy, by other people (1)
One line per show, most statements first. The link opens Carolynn's full record on that show: the calibration, argument clarity, speaking style and every statement made there.
| Show | Role there | Eps | Statements | Record | |
|---|---|---|---|---|---|
 Y COMBINATORLEDGER | Managing Director, Legal, Y Combinator | 4 | 25 | 100% 7/7 | full record on the Y Combinator Startup Podcast → |