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They can sell some of their shares to private investors. A VC expects to earn many times their money on the investment... which requires dramatic and risky exp
by wavephorm 14y ago
They can sell some of their shares to private investors. A VC expects to earn many times their money on the investment... which requires dramatic and risky expansion of the business.
- noahc 14y agoPrivate investors of all types have their own problems. Everyone from the local angel group to friends and family to private equity firms all have advantages and disadvantages. A VC wants 10x, I see no better way to allow this than to let a founder take some money off the table and shoot for the moon. As far as risk is concerned with expansion, as long as the founders and the VC want the same outcome I dont see what the big deal is with taking on more risk, particularly for founders with other peoples money. Even better after theyve taken money off the table!