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Such a good catch. Let's see that with an example. A startup on demo day raises $25m post. 7% on 150k means it's 11.7 multiple. And 7% on 125k means its 14.7
by nrudrapp 5y ago
Such a good catch. Let's see that with an example.
A startup on demo day raises $25m post.
7% on 150k means it's 11.7 multiple.
And 7% on 125k means its 14.7 multiple.
That's +3x jump on every deal.
Now let's say company exited at $1b.. the difference in multiple is +100x!!
Give that person a raise YC, whoever suggested to go down to $125k.
As somebody else has suggested below. This 375k is mostly cheaper way of buying prorata at series A