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1 point by Elof 0 minutes ago | edit | delete [–] Totally missed this 10 days ago, but here are some things to consider based on my experience. Look at their f
by Elof 6y ago
1 point by Elof 0 minutes ago | edit | delete [–]
Totally missed this 10 days ago, but here are some things to consider based on my experience.
Look at their funding. Not always bad, but have they taken a bridge round (something to keep them afloat while they get a bigger round together).
Did they have a down round i.e. valuation stayed flat or went negative after they took more money. This almost always dilutes common stock way more then preferred stock and VCs usually have preferred. They often re-cap in this case as well (change the terms of the cap table). Basically any time VCs have the upper hand they will dilute common stock holders.
Really, don't expect to get any meaningful amount of money unless the company sells for way way more than they raised or if the company goes public and the only way you're going to make the big bucks is if the company sells for a huge multiple while they are relatively small or goes public.