Zack KanterVerified account

This is an insane amount of dilution for a late stage business to take. Flexport is an outwardly incredible operation run by some of the most impressive people in the world, but it’s hard to understand how anyone other than late-stage investors benefit.https://twitter.com/typesfast/status/1098629369268850688 …

One way to understand how all investors (including all of us as employees) benefit from a large round of funding might be to multiply the number of shares they own by the difference between the new price per share and the old price per share.

Even better would be to estimate the per share value in 20 years under different funding scenarios. If the price per share is expected to be higher as a result of the funding, then all investors were made better off as a result of the funding.

I think the PPS would have to be 25% (or 33% if 3B was post money) in all scenarios where funding was raised compared to a world it wasn’t to breakeven as a prior shareholder (assuming you’re not running out of money)

Also I’m not questioning the value of raising capital b/c it unlocks a magnitude of opportunity that far outweighs the 25-30% incremental dilution. I’m commenting on an empirical fact that technology companies raising a 4th-5th round usually don’t sell this much of their co