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Could you give some specific examples where a startup was sold at a loss and some of the investors actually got out more money than they put in? I know that wh
by scribu 9y ago
Could you give some specific examples where a startup was sold at a loss and some of the investors actually got out more money than they put in?
I know that when a public company goes bankrupt, the investors with preferred stock can, at best, get back all their money, but they can't make a profit.
- lovich 9y agoVCs can invest money with garunteed payments greater than 1x. It doesn't mean that if the company sells for less than their investment they'll get their money back, but if they put in 1x and are garunteed 2x and first in line to get paid, when the company gets sold for 3x the VC gets their 2x and all the other investors/employees get to pull from the leftovers