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We have protections against arbitrary dilution, by e.g. issuing extra stock or doing a new round that values the company at $1. We've never needed them. What
by pg 17y ago
We have protections against arbitrary dilution, by e.g. issuing extra stock or doing a new round that values the company at $1. We've never needed them. What I meant by the "no soup" remark was that we don't care that much about legal protections; it is a more powerful deterrent that we would blacklist any VC who screwed us over-- or who screwed over any of the startups.
- Kliment 17y agoThat in itself speaks strongly for YC. I'm tempted to make a joke about startup unionization.
- falsestprophet 17y agoIn general, is maintaining a good reputation an adequate incentive for VC firms to avoid abusing founders or angel investors?
- pg 17y agoEmpirically, very much so. Stories of investors maltreating founders are not uncommon in the startup world generally, but they are extremely rare among the YC alumni.
- newy 17y agoCreating this "repeat player" effect is awesome. Sometimes the best-drafted legal provisions can have loopholes. This kind of leverage makes everything much simpler.