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How does that make sense for the VC though? They're not in the business of cashing founders out.
by jmathai 14y ago
How does that make sense for the VC though? They're not in the business of cashing founders out.
- snprbob86 14y agoPresumably the founders are committed to growing the product line and potentially creating a new publicly traded developer tools company.
- deleted 14y ago[deleted]
- noahc 14y agoOne senerio would be give the founders enough that if they swing for the fences and strike out they still have enough. This aligns incentives and removes risk from founders. In addition, if founders want to take cash off the table and that is what it takes to make a great investment in github you do it.
- deleted 14y ago[deleted]
- amorphid 14y agoVCs are in the business of making money for their fund. Any deal that helps work towards that goal is legit. What a company receiving the money does with the money invested is secondary to getting a return on investment. For example, Elevation partners vought Facebook shares via secondary markets because they expected the shares to be worth significantly more than the initial purchase price .* The investment never went into Facebook's bank account. * Source -- http://m.techcrunch.com/2010/04/05/source-elevation-partners-got-about-1-of-facebook-for-90-million http://m.techcrunch.com/2010/04/05/source-elevation-partners....