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The Damaging Psychology of Down Rounds

Both Sides of the Table

Often that is a good incentive because it keeps VCs from screwing people over since a bad reputation or bad working relationships could cost you deals in the future. But in this case it works against the founders.

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Startup Fairy Tales and Other Tall Tales That Venture Capitalists Tell

Growthink Blog

The angel then introduces the entrepreneur to his or her wealthy friends and business connections who, based on the good reputation of the referring angel, also invest. Technical progress and market traction are much slower and cost a lot more than anticipated. There are a lot of dark, hard days.