"In order to buy sole control, he set the valuation of the new shares at something that washed out the "A" round guys. " That's a significant over-simplificati

"In order to buy sole control, he set the valuation of the new shares at something that washed out the "A" round guys. " That's a significant over-simplification of what happens in this type of situation. There are all type of scenarios, and I've certainly been at a startup in which the founders have ended up with <5% of the company after investors came in with a significant round of $$$ required to grow the company - they certainly didn't consider it a "giant red-flashing signal" (they approved the deal, after all) but instead, a huge raise that led the company to a $1Billion+ valuation.