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At what point did it become OK for investors to eat such a gaping chunk of equity by simply contributing money, when founders/engineers/technical talent contrib
by dclowd9901 14y ago
At what point did it become OK for investors to eat such a gaping chunk of equity by simply contributing money, when founders/engineers/technical talent contribute not just money, but time and effort as well?
Is it simply because they are the ones holding the cards? If so, fuck that, and fuck investors.
- RickHull 14y ago> At what point did it become OK When everyone agreed to it, I suppose. > If so, fuck that, and fuck investors. This seems rather naive. No one takes investors for the fun of it. Investment describes a mutually beneficial relationship that occurs when an enterprise needs funding. Investors shoulder the financial risk and burden and thus demand compensation in the form of (probably worthless) equity.
- slurgfest 14y agoYou are right, the burden is on those taking investment to make sure it is good for them. On the other hand, there may be negative externalities to a mutually beneficial deal between an investor and a founder, for an early employee.