Wednesday, June 15, 2016

Startup Fundraising Idea

I heard an interesting startup fundraising idea from a well know VC. He made the point that he always takes at least 20% of a company. This has led to long discussions with entrepreneurs who, at times, had fought hard for the difference between 19% and 21%. He highlighted that most CEOs, looking to raise funds frequently show up at his door with two other cofounders, each with 33% of the company. His point: You've already given away two-thirds of your company and now you're fighting me over a 2% difference. Instead, consider keeping 100% and then give 10% to the first few people you hire for key positions. They might not technically be cofounders, but they're getting an excellent deal.

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