"Because if you invest $500k, you get information rights, and a significant number of votes. If you invest $5k, you get nothing, " No - not at all. First, the

"Because if you invest $500k, you get information rights, and a significant number of votes. If you invest $5k, you get nothing, " No - not at all. First, there is no such thing as 'information rights'. Second - when you 'invest' - you get shares. Those shares have 3 'rights' generally: 'votes', 'dividend rights' and 'liquidity preference' Those rights differ depending on class of shares and specifics of the deal. Whether you invest $5 or $5 million - it could very well entail the exact same terms. For example, most later stage investors do not get enough votes to influence the outcome, they don't get a seat on the board, and they don't get any real liquidity preference.