3 ms·
Founder and angel shares absolutely dilute with additional rounds of funding unless you have provisions that are very rare in term sheets and founder agreements
by spullara 7y ago
Founder and angel shares absolutely dilute with additional rounds of funding unless you have provisions that are very rare in term sheets and founder agreements.
- coderheed 7y agoPro rata [1] is pretty standard [edit: at least in early stage startups], so investors typically have the option to maintain their level of ownership by putting money into the round. Everyone else gets diluted. I think in practice investors only get diluted if they actually want to. I'm not sure how often pro rata is extended to founders, but I would guess it's pretty common. [1] https://techcrunch.com/2017/09/13/how-pro-rata-works-in-venture-capital-deals/ https://techcrunch.com/2017/09/13/how-pro-rata-works-in-vent...
- spullara 7y agoIt is not common that founders get pro-rata rights.