4 ms·
Companies at late stage also need to raise money to establish valuation. That doesn't seem to be the case here though.
by jiveturkey 6y ago
Companies at late stage also need to raise money to establish valuation. That doesn't seem to be the case here though.
- MichaelZuo 6y agoIf late stage implies that the founders have already been diluted significantly, why would they would want to be diluted even more? (Assuming they still believe in the future of the company)
- marcinzm 6y agoBecause they believe the extra money will allow them to increase the valuation more than it dilutes them.
- MichaelZuo 6y agoI can’t really think of one example really where that actually ended up in favor of the founders. Even Kalanick’s Series D raise at Uber back in 2014 seemed a bit weird, and in retrospective given what happened since... I imagine for it to be actually net beneficial there would still need to be at least 5x or 10x growth potential and assuming it’s already a unicorn that somehow can’t finance otherwise on favorable terms... would imply a quite unique situation.