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It derisks the company at low cost because you're raising money on great terms. It's almost always a good idea to have extra cash in the bank, especially when t
by vecter 11y ago
It derisks the company at low cost because you're raising money on great terms. It's almost always a good idea to have extra cash in the bank, especially when that cash comes.
I once heard a quote along the lines of "the company that wins the space is the last one to raise funding before the funding market turns south."
- ffyyg 11y agoAnd if you gave even 1x prefs on that vanity raise, then you've turned your "okay not great" outcomes into bad outcomes. Rule of thumb: if somebody raises at exactly or just over s billion, they did it because it feeds their ego and every other excuse is just an excuse.
- vecter 11y agoWhere did I mention vanity as a part of the raise? You missed all of the points I made and then attacked a strawman. When you raise on your terms, as these guys probably did, you get (1) a great valuation (i.e. cheap money) and (2) great terms (i.e. 1x or better liq pref).