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> Maybe I'm missing something here, but it sounds like they aren't putting any skin in the game. The VC will benefit from all of the upside while literally taki
by twblalock 7y ago
> Maybe I'm missing something here, but it sounds like they aren't putting any skin in the game. The VC will benefit from all of the upside while literally taking none of the risk.
They funded the company and they could lose their money if the company fails. That's their risk. Now they are trying to help the company build a team and somehow that's a bad thing?
- Sebguer 7y agoBecause the entire point of this exercise is not funding the company? It's not "fund the company AND build a team", it's offer this instead of funding the company, as a separate thing.
- twblalock 7y agoThe VCs pay for the team: > The companies pay SEV in common stock shares, the same held by the startups' rank-and-file employees, and SEV's team, in turn, get paid salaries by the firm and also receive part of the firm's carry like a traditional venture model. This is an exchange of money (to pay salaries, which is what a lot of VC money eventually gets used for) for equity. In other words, it's VC funding. It might look a little different than normal but that doesn't mean it's not funding.