4 ms·
One way: take in new money at a lower value than the founder would like. There is always a reasonable difference of opinion and majority shareholders can exploi
by T_S_ 16y ago
One way: take in new money at a lower value than the founder would like. There is always a reasonable difference of opinion and majority shareholders can exploit this to dilute the value. They don't even have to take risk. Just make the company cash rich instead of cash poor. That's one reason why early investors demand anti-dilution clauses. But if you are a cash poor founder it won't do you much good.
I'm sure there is a lawyer here around that can help prevent such shenanigans. Anyone?