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One of the reasons to be very wary of taking funding... you may be forced to turn down $500M because your investors aren't going to take a simple 2X multiple.
by ry0ohki 14y ago
One of the reasons to be very wary of taking funding... you may be forced to turn down $500M because your investors aren't going to take a simple 2X multiple.
- jacquesm 14y agoVery few investors are going to turn down a $500M exit, even if it is only at a 2X multiple. Giving your investors the ability to torpedo a deal of that magnitude seems to be a failure in its own right. So if you do get funding make sure you're not handing over control over future exits. What's good enough for the founders should be good enough for the investors. A good set of 'drag along/tag along' clauses will take nicely care of that possible scenario.
- edouard1234567 14y agoI agree, it's unlikely investors would block a deal like this if the founders want it. At $20 per user I think it's a very reasonable valuation for a company at this stage, same type of valuation instagram and foursquare got. However I do buy the fact that the founders believe they can create more value and continue to grow.