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Of course they should. There're various financial instruments enabling this very well. Simple question and Dave is totally right while Fred still lives in the
by tferris 14y ago
Of course they should.
There're various financial instruments enabling this very well. Simple question and Dave is totally right while Fred still lives in the past and ignores the basics of dealmaking.
The first and those who were quick in decision making should pay less than those who join later the same round. To join a full party is always a safer bet than being the first guest, so simple.
Investor's reputation/brand/name and their network are other key drivers to the prices.
There's one exception: when VCs know each other very well and brought themselves into the round/deal then their good relationship (and potential other deals running besides) will usually prevent different prices.
- fredwilson 14y agoi may be living in the past, but rounds/syndicates are held together by the glue of price and terms. when you don't have that, there is no round. just a bunch of investors, like you have in the public markets. you might want the private markets to behave like the public markets. but be careful what you wish for.
- danoprey 14y agoThe way I look at it, all investors in the same round should pay the same value, but that's not neccesarily in just dollars. If one firm has a lot of added value and another is dumb money, why should they get the same price? If you look at it another way, if they are the same firms offering the same deals (at different prices) but instead of joining together in a round, they are competing, surely you would recognise the added value. Why not in a joint round?
- jammur 14y agoCan you elaborate on this, Fred? What's the benefit of having a round, over "a bunch of investors"?
- seiji 14y agoTradition, paperwork, the knowledge that you are a beautiful snowflake, and a big bragging press release?