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> Raising money when the VCs are willing to throw it at you is a good strategy when you know you'll burn through alot. Yes. Doesn't it also indicate that you a
by darkarmani 12y ago
> Raising money when the VCs are willing to throw it at you is a good strategy when you know you'll burn through alot.
Yes. Doesn't it also indicate that you are giving a lot of the company up at the current valuation? ie: you are betting that a (near-term) future valuation is lower, so you want to lock in the money now.
- dragonwriter 12y ago> ie: you are betting that a (near-term) future valuation is lower, so you want to lock in the money now. Or, you know, you think the money now effects the long-term valuation such that, if the current owners are giving up x proportion of the company in the proposed round, with v0 as the anticipated future value of the company if the round doesn't happen and v1 as the anticipated future value if it does, the owners think that v0 < v1×(1-x)
- fweespeech 12y agoWell, you are hedging your bets. It is alot like buying a house imo.