Tricky situation that only you can make the final call on.  Some things to keep in mind though:<p>1. Your YC partner is very clearly looking out for their own interests - they have more negotiating leverage when you&#x27;re small, both in deals and in a potential acquisition.  Nothing wrong with that.  But remember that it&#x27;s <i>your</i> job to look out for your own interests and that of your company.  Nobody else is gonna do it for you.<p>2. Yes, it could damage the relationship with them if they find out.  And it&#x27;s fairly likely they will find out; YC alums help read applications.  Plan accordingly.<p>3. It&#x27;s up to YC to decide whether it&#x27;s a conflict of interest on their end.  They have funded direct competitors in the past (with several hundred startups in their porfolio, it&#x27;s kinda hard to avoid it), though, so I doubt they would consider it a dealbreaker if your startup looks good on its own merits.