[clogston]

Maybe if YC is their /only/ investor? I'm not familiar with how YC's initial investment is structured. But your scenario won't exist for many (close enough to all?) startups who have investors. What likely happened is the startup either:

1) raised their money in a priced round. It's therefore unlikely they have unilateral control of the board.

or

2) didn't do a priced round but went with convertible notes. Those initial investments are now interest-accruing debt on their balance sheet.

In either of those scenarios there's going to be immense pressure to not let the business get comfortable.

[codingdave]

YC's standard deal (at least according to their FAQ) is for 7% equity. So I think it is quite likely that YC startups do hold the majority interest.

As for other scenarios, I can't really speak to that - I personally have never been with a company that accepted any deal that included loss of control. I'm sure it happens, it just doesn't match my experience.