Are there investors/VC’s that provide liquidity for SaaS founder in a Series A?

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JASON LEMKIN

No, not at $115k MRR.

Most “traditional” Series A VCs that write $10m+ checks will provide some liquidity for founders in hot deals.  And as the deals get bigger, to $50m+, as long as the deal is hot — secondary liquidity is par for the course.  It lets the bigger VCs buy more of the company.

Earlier than this though … it’s a terrible idea.  If a founder is willing to sell some of his stock at say an $8m valuation … they can’t possibly think the company can become a unicorn.  If you did .. you’d never sell a single share at that price.  Not only share.

My rule is consider secondary liquidity in any round with a nine-figure valuation.  Below that, it’s for suckers … or for founders that aren’t totally, utterly going for it (which is OK, just, not venture-appropriate).

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Published on February 4, 2016
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