No. It is close to the edge, though.

I try to back into the following math — does the CEO own enough after the next round to still have at least 10% at IPO?

If my math says no, then I generally try to grant the CEO extra shares when I invest — out of the pre-money. That is, in essence, a very modest restructuring. In some cases (it’s not common), where > 50% has been sold in an angel/seed round, the company will sometimes have to be restructured to get traditional venture financing. This can be stressful 🙂

View original question on quora

Related Posts

Pin It on Pinterest

Share This