Business Model, Down Round and Pay to Play

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Business Model

Down Round

Pay to Play

Cram Down – A Test of Character for VCs and Founders

Steve Blank

APRIL 26, 2022

For existing investors, sometimes it was a “pay-to-play” i.e. if you don’t participate in the new financing you lose. A cram down is different than a down round. A down round is when a company raises money at valuation that is lower than the company’s valuation in its prior financing round.

Cram Down

Cram Down Founder Venture Capital Recapitalization

What Most People Don’t Understand About How Startup Companies are Valued

Both Sides of the Table

FEBRUARY 14, 2016

So inside rounds get delayed and when there are non-participants you often find “recaps” or “structure” or “pay-to-play” provisions. Why Down Rounds are Harder Than You May Think. Down rounds are hard. Plus, down rounds trigger anti-dilution provisions.

Valuation

Valuation Down Round Startup Later Stage

StartUpRoar

Cram Down – A Test of Character for VCs and Founders

What Most People Don’t Understand About How Startup Companies are Valued

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