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It's possible it was "sold at a loss" but the early investors made money. e.g. by investment round: A: $1m for a $10m valuation B: $5m for a $40m valuat
by andrewprock 7y ago
It's possible it was "sold at a loss" but the early investors made money.
e.g. by investment round:
A: $1m for a $10m valuation
B: $5m for a $40m valuation
C: $12m for a $100m valuation
A "fire sale" of $15m would yield a profit for Series A investors, a probable loss for B, and a certain loss for C.
- gaogao 7y agoLiquidation preference for later rounds might muck up that calculation.
- ska 7y agoOr if they were already in financial trouble and C came in with 1.x liquidation preference, they get everything (or near it)
- user5994461 7y agoBut A and B would have liquidation preference too, so how is the money split?
- ska 7y agoA and B may not have it at all, and anyway if C pushed a hard bargain, theirs will come first. At any rate, the devil is very much in the details.