3 ms·
If a startup returns 2X-3X, the founders won't necessarily make a lot of money. A lot depends on the liquidation preference in the financing terms. Although n
by dshah 18y ago
If a startup returns 2X-3X, the founders won't necessarily make a lot of money.
A lot depends on the liquidation preference in the financing terms. Although not common these days, there was a time when VC deals were structured such that a large percentage of an exit went straight to the investors before the founders saw any money.
- mattmaroon 18y agoThat's why I said in general. It definitely depends on your valuation and terms (participating preferred can rape a 2x exit) but if you take a few mil in VC money on a few mil premoney, then sell for 3x, you probably got rich.