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Usually you get investment from a single shell company whose shareholders are the 1000 investors and the CF platform (which often has golden shares) Board seat
by karambahh 9y ago
Usually you get investment from a single shell company whose shareholders are the 1000 investors and the CF platform (which often has golden shares)
Board seat(s) go to a representative of the CF platform.
So technically you don't have a long cap table but it's anyway not a good sign for next rounds so you're, in practice, right.
For instance what if the CF platform goes under? It's magnitudes of orders more likely than a VC...
- fludlight 9y ago> For instance what if the CF platform goes under? It's magnitudes of orders more likely than a VC... The bankruptcy trustee that takes over the CF platform hires some third party to service all the shell companies. Could result in substantial additional costs to the investors or the company. Who pays depends on how much value is left in the bankrupt platform, what's in the contracts, the efficacy of third parties involved in the bk, and the whims of the trustee and the judge.