How venture capital funds make money: why one big win pays for all the startups that fail
Liquidation preference: why a venture capitalist wants to be paid back first
A startup is sold for far less than anyone hoped. You might think each owner gets the same part of the price as their part of the company. One line in the contract with the venture capitalist changes that.
-
1
Another startup of Miva's fund, an app for planning meals, never took off. Its founders want to stop. A buyer offers $8 million for the whole company. Over the years, the fund put $5 million into it, for a fifth.
-
2
Rono counts: a fifth of $8 million is $1.6 million, so most of the fund's $5 million would be gone. Yet Miva is calm.
The rest of this episode is for subscribers
Subscribe to read every premium episode. You can cancel when you want.
Paid yearly: $99 instead of $119.88