4 ms·
I'm not sure I understand the question. What do you mean by "you have money in your personal bank account?" Are you saying that some of the money put in by a VC
by draz 13y ago
I'm not sure I understand the question. What do you mean by "you have money in your personal bank account?" Are you saying that some of the money put in by a VC ends up in your personal bank account? If it does, it's through a salary you withdraw from the company. VCs, or any investor, will want X seats in your board, which will also give them a say about your salary. So if you got $1M in funding, no sane board will allow you to take a $700K salary.
Your win from the investment is that now your company has money to move faster, by hiring more talented people, buy equipment that is important to the business, pay vendors, etc. In short, to scale. You, the founder, keep a % of the company throughout this time, but you'd only see it translate to real money in the case of an acquisition/IPO/sell off. Your motivation, then, is to increase the value of the company so that % you have in the company will translate to more money in the cases I mentioned.
After this long answer, I feel like I still haven't actually answered your question because you're probably asking about something more subtle :-)
- objclxt 13y ago> You, the founder, keep a % of the company throughout this time, but you'd only see it translate to real money in the case of an acquisition/IPO/sell off If Evan Spiegel and Bobby Murphy weren't taking $10 million+ off the table during funding rounds they'd probably be far less likely to turn down a $3 billion offer. It is fairly common for founders to trade personal stock for cash during a funding round. Perhaps you mean during initial funding? It is absolutely possible - and common - for founders to take money of the table during secondary funding rounds.