To raise or not to raise

Re:To raise or not to raise by bri3d on Thursday February 16, 2012 @12:46AM (#3597534)

"...You’ve built a successful business, which you have no interest in selling, and would like to extract some liquidity..."

Why would a VC put money into a company in this situation?

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Re:To raise or not to raise by neodude on Thursday February 16, 2012 @12:50AM (#3597550)

The company is doing great, has a solid growth strategy and headed for an IPO. Why wouldn't you invest in a company like that?

Not all VCs are early-stage, high-risk investors.

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Re:To raise or not to raise by bri3d on Thursday February 16, 2012 @12:53AM (#3597561)

"Headed into an IPO" says "interest in selling" to me - it's a relative rarity to IPO a company while still maintaining a personal controlling interest. I guess it's just a difference in semantics.

(updated to clarify that I meant a personal controlling interest)

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Re:To raise or not to raise by true_religion on Thursday February 16, 2012 @01:43AM (#3597685)

Don't the founders of Google maintain a controlling interest in the company, even now so many years after IPO?

I think a common tactic is to sell preferred non-voting stock during IPO, and retain voting stock for the founders. They get to keep control of the company, in exchange for standing last in line during a possible liquidation.

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Re:To raise or not to raise by bri3d on Thursday February 16, 2012 @10:48AM (#3599136)

Google maintain a controlling interest, but the founders themselves don't. I believe at IPO the founders controlled about 37.6% of the votes in Google and the board controlled 61.4%. So Google still got to direct Google (rather than their public investors), but the founders personally could be overrun by the board.

Facebook is one of the very few companies I can think of which is IPOing with a personal controlling interest from a founder.

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