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Prospective investors have preference items, rights, and control. This is why common is valued "way below"-- and it's rational for employees to view it the sam
by mlyle 4y ago
Prospective investors have preference items, rights, and control.
This is why common is valued "way below"-- and it's rational for employees to view it the same way.
- JamesBarney 4y agoFor sure. (Though in our case the investors only had preference and moderate anti dilution rights vut had less control than common) We raised over a year ago and have grown revenue 300% YoY, and only had .5 arr in preferred. And they didn't value it as highly as the investors a year before. They preferred cash.
- HWR_14 4y agoIf your example is "they don't value it as much" is based on a valuation over a year ago, it seems to be flawed. Could you raise at the same terms? Those young whippersnappers wouldn't even buy your house in 2009 either!
- JamesBarney 4y agoI'd be surprised if we couldn't raise at 3.5x ARR, typical SaaS margins, and 300% YoY growth.
- HWR_14 4y agoI'm not saying you couldn't raise. The question is could you raise at the same terms? As I understand it, even if your valuation goes up, there's a lot more demand for more preferential treatment of the shares, etc. A little over a year ago seems to be the recent peak of VC funding and valuations.