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Sometimes a small portion of a round is used to buy out previous investors or sell some founder/early employee shares, but that's not the point of a round like
by jonathanjaeger 11y ago
Sometimes a small portion of a round is used to buy out previous investors or sell some founder/early employee shares, but that's not the point of a round like this. If it's not for growth of the company, that would be a bad sign.
- grinich 11y agoSometimes it's a much larger portion. For example, when Twitter raised its last pre-IPO round of $800 million, half of that immediately went to cash out early employees and investors. FB also did this when DST invested. Most venture funds aren't set up for the current timeline to liquidity (I'm sure to VC's chagrin). http://www.wsj.com/articles/SB10001424053111903520204576482351255849460 http://www.wsj.com/articles/SB100014240531119035202045764823...