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Because 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 compa
by Sebguer 7y ago
Because 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.