My co-founder and I sold 40% of our company to our first investor for $1.25M. Is that too much to still be interesting to VCs?

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 (itโ€™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 ๐Ÿ™‚

View original question on quora

Published on December 31, 2017

Pin It on Pinterest

Share This
[{"code":""
[{"code":""
"label":"Not quite"
"label":"Not quite"
"win":false}
"win":false}
{"code":"WHEEL10"
{"code":"WHEEL10"
"label":"10% Off"
"label":"10% Off"
"win":true}
"win":true}
{"code":"WHEEL15"
{"code":"WHEEL15"
"label":"15% Off"
"label":"15% Off"
"win":true}
"win":true}
{"code":"WHEEL30"
{"code":"WHEEL30"
"label":"30% Off"
"label":"30% Off"
"win":true}
"win":true}
{"code":""
{"code":""
"label":"Free VIP Pass"
"label":"Free VIP Pass"
"win":true}
"win":true}
{"code":"WHEELVIP"
{"code":"WHEELVIP"
"label":"Free VIP Pass"
"label":"Free VIP Pass"
"win":true}
"win":true}
{"code":""
{"code":""
"label":"Spin again"
"label":"Spin again"
"win":false}
"win":false}
{"code":"WHEEL10"
{"code":"WHEEL10"
"label":"10% Off"
"label":"10% Off"
"win":true}
"win":true}
{"code":"WHEEL25"
{"code":"WHEEL25"
"label":"25% Off"
"label":"25% Off"
"win":true}
"win":true}
{"code":"FREESHIPPING"
{"code":"FREESHIPPING"
"label":"Spin again"
"label":"Spin again"
"win":false}
"win":false}
{"code":""
{"code":""
"label":"Almost"
"label":"Almost"
"win":false}
"win":false}
{"code":"WHEEL25"
{"code":"WHEEL25"
"label":"25% Off"
"label":"25% Off"
"win":true}]
"win":true}]