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Different motivations AND different evaluations of the company and market between the VCs and the founders. Also different risks and rewards for the VC and the
by babesh 7y ago
Different motivations AND different evaluations of the company and market between the VCs and the founders. Also different risks and rewards for the VC and the founders.
Sometimes the VC thinks that the market the startup is in is a bubble and the VC will push for growth over long term health. Sometimes the VC is right and sometimes they are wrong.
I've seen this play out where the VC pushed for growth probably to get acquired. The VC may have been mostly right since the market was a bubble that popped. One competitor was able to pivot though and ended up with 4X. Most competitors failed. Perhaps the VC wanted the money or perhaps the VC didn't believe in the founders.
Sometimes the startup has no market and then the VC may push for actions that lead to acquisition. Sometimes the founders demand additional incentives in the acquisition.
I've seen this play out since the VCs probably at best break even and want to wash their hands and the founders threaten to stop the deal since they lost out on salary and stock founding the company.