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It is a huge percentage of their funding, around 1/6th. If a company where to raise 6m and the founders got 1m not by equity, but by dividends! That just doesn'
by ssx 15y ago
It is a huge percentage of their funding, around 1/6th. If a company where to raise 6m and the founders got 1m not by equity, but by dividends! That just doesn't happen.
If the founder's want to sell some of their equity, I'm fine with that, but that is NOT what happened here. This is purely a pay-day.
If I knew my company was going to be the next eBay for realestate, why would you hamper your company by taking 21m off the table. This signals greed and/or being unsure of your future success.
- gojomo 15y agoIf the founders retain a majority, this is less than 4% of their stake — that percentage is more relevant in analyzing the confidence signalling and motivations than a superficially large "$21 million" figure.
- ssx 15y agoClearly you still don't understand. They didn't sell 4% of their stake. If they did that, it would be somewhat reasonable. What they got was a dividend. In other words a bonus. And yes the figure is still "large" because it is 1/6th of their funding that goes to their pockets, rather than the company.
- sunir 15y agoIt would be completely reasonable if they sold equity to take money from the round. Alternatively they could offer a retention bonus to everyone based on current salary.