Re:The Lessons Google Ventures Learned from Secret
by harryh on Wednesday May 06, 2015 @08:43AM
(#9498168)
1. To anyone. You're just buying the cash. Sell it at a 5% discount to cash on hand and I'll buy it. What the founders do is irrelevant.
2. Founders do get options. They just get them with a very low strike price because when they start the company it's worthless (essentially).
3. Secret didn't fail because it raised money at too high a valuation. It failed because it didn't achieve real product market fit. If it had achieved fit then the excellent terms on which they raised money would have been very good for them.
To your point about "invest on any terms you offer" what I'm trying to show you here is that having investors buy preferred shares is good for everyone involved.
2. Founders do get options. They just get them with a very low strike price because when they start the company it's worthless (essentially).
3. Secret didn't fail because it raised money at too high a valuation. It failed because it didn't achieve real product market fit. If it had achieved fit then the excellent terms on which they raised money would have been very good for them.
To your point about "invest on any terms you offer" what I'm trying to show you here is that having investors buy preferred shares is good for everyone involved.