The PE market around firms at about this size is getting very, very interesting, and I think increasingly you’re going to see founders build companies engineered to achieve a similar outcome, with a capital stack to match.https://twitter.com/Shpigford/status/1326153473956716544 …
I'm quite curious about why the seed investors walked away from $800k, when the purchase prices was $4M. Is that something you can explain (in the general case, if not in this specific case)? Thx.
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Speaking generally, VC is investing in the expectation of hitting "home runs." Companies which do not end up achieving that trajectory affect returns minimally. One might choose to balance return of the original capital with the impact on your firm's brand w/ founders.
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The conversation might go: "You took a shot. It didn't pan out. Such is the nature of the venture business. We don't want to block what would be a good outcome for you and the team, so we will give you what is effectively a gift and get out of your way to achieve win for team."
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