3 ms·
Who did they sell it to? That person is now a cofounder presumably. I guess it complicates the story a bit. Selling means you don't believe in the venture - you
by quickthrower2 3y ago
Who did they sell it to? That person is now a cofounder presumably. I guess it complicates the story a bit. Selling means you don't believe in the venture - you are doing the opposite of what you are asking the investor to do!
If they sold it to get another expert on board and the 100k went into the company that might be different I suppose.
- max_ 3y agoI use the word "sell" to imply that someone invested $100k in the business in exchange for 20% equity.
- quickthrower2 3y agoSounds like an angel round (of yore… I think YC now does $500k investment). 20% is quite a solid chunk though.
- nivertech 3y agoYou phrased your question like the founder takes 20% of their own equity off the table. That's why people responding negatively. Committed founders would invest their own money and work for free (or minimum salary), and use that $100K to pay company expenses/salaries. Investing $100K for 20% in pre-seed company is possible if it's dillutable. Take into account that proper priced rounds require lawyers. A much better aproach would be to sell SAFE.