2 ms·
I wonder how much of an analogy we can draw to raising outside capital to fund your own venture.
by hkmurakami 11y ago
I wonder how much of an analogy we can draw to raising outside capital to fund your own venture.
- lordnacho 11y agoFund: You get paid if nothing happens, traditionally 2% but probably lower on average these days. If things go well, you get 20% of the high watermark profits. If they go south after that, you don't pay it back. You're always paid in cash. VC: You get paid a salary that's below what you'd probably get in an established company, plus you get equity. But the investors will typically try to get preferred stock, in case things go badly (liq pref). If things go well, you can sell some shares at each subsequent round, but of course you have less after each. And some of the investors will want board seats, which means a degree of control.