Simple framework for diligencing investors with portfolio founders: - would happily give pro rata again (~10%) - happy they don’t have / wish didn’t have pro rata (~80%) - wish they weren’t on the cap table (~10%) When a founder waffles between 1/2, it’s a 2. Between 2/3, run.
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why does everyone always act like the money can only go one direction in. If you have someone in category 3 toss them out of the cap table - get someone to buy out their positions ASAP.
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If you’re doing well as a company, it’s easy to find buyers - it isn’t as easy to find sellers.
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