[zio99]

I asked this question before: http://hackerne.ws/item?id=4391638 and still wondering: 1. Does Y Combinator then own a stake in Makr.io or Disapora? 2. When a company pivots, does YC own a stake in the pivot? 3. How about side projects?

[jmonegro]

YC owns a stake in Diaspora. Diaspora owns Makr.io, therefore YC owns a stake in Makr.io, as long as the Diaspora team set it up as an entity separate from Diaspora, not owned by Diaspora (the company, not the team).

When a company pivots, it's the same thing. It's usually the same company legally and fiscally, in which case YC still has a stake. If the company pivots and the founders decide to set up a new company, and the old company does not own the new company, then YC does not have a stake in the new one unless the founders are good sports and cut them in.

Side projects are usually built under the corporate umbrella, in which case the profits/losses from the side project count as part of the owning company's. In this case, YC's stake in the parent company carries over to all side projects (unless, again, they set it up as something separate from the company).

[zio99]

What's stopping someone from using the lessons learned from a failed company over to a new entity - IP ownership? E.g. I'm pretty sure Waterloo Velocity doesn't own a stake in Pebble (the iPhone watch) even though the project began there as Allerta (a Blackberry watch) and was admitted into YC as inPulse. Wondering if these are just company name changes, or product name changes, or separate entities? As the founder would have therefore received funding for R&D from Velocity, YC and Kickstarter without necessarily putting out a product. (Though I'm sure there's some intellectual property claims made). That would mean a +1 in favour of patents, to protect the interests of the accelerator.