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Not "crazy". Crazy is multiple liquidation preferences, participating preferred, founders and early employees in 8-figure exits being unable to buy a house on w
by michaelochurch 15y ago
Not "crazy". Crazy is multiple liquidation preferences, participating preferred, founders and early employees in 8-figure exits being unable to buy a house on what they actually get, and the fact that founders have to pay the VC's own legal fees. That shit is fucking nuts. Founders cashing out for less than the market value of the work they produced to get to a seed round? Not crazy.
- tptacek 15y agoThat's crazy if it happens because VCs conceal the terms of their deal, or offer exploding deals that don't leave time for due diligence. On the other hand, it's not crazy if the board knowingly accept those terms. If they do, it's because there weren't better terms to be had somewhere else. All of these terms have a dollar value. The more onerous the terms, the lower the implied valuation of the company.