4 ms·
This argument doesn't play... All investments have similar if not equal concerns: is your current investor going to re-invest? Might potential rivals instead co
by radley 17y ago
This argument doesn't play... All investments have similar if not equal concerns: is your current investor going to re-invest? Might potential rivals instead collude in their offer?
- smanek 17y agoIf I take $100K from an angel no one is going to wonder why the angel isn't putting in $2Mil in the next round - angels just don't handle deals that big. If I take $100K from a VC and that VC opts not to put in another $2Mil, everyone will wonder what the VC saw that made them not want to invest.
- trapper 17y agoHaven't you got bigger worries if someone who invested in you once won't invest again?
- alanthonyc 17y agoYou're missing the point of the article. It's that the seed VC will essentially have control of the appearance of your startup's chances for success. If they don't reinvest (for whatever reason, even if your company is in good shape), you will look bad. If they do reinvest, they won't be doing so at fair value.
- trapper 17y agoGood point, you're right, I missed it.
- radley 17y agoI'm sorry, but these points don't play in the real world. The concern is fair but over-simplified and thus moot. If your business' prospects depend primarily on the outward appearance of your investors, it really shouldn't exist. And a VC that depends on another VC to "pick the winners" should just turn over their funds since they have abstained from their purpose.