ReadWriteStart
JUNE 1, 2020
In very few specific cases, depending on the nature of the business, the business model might demand a considerable gestation period or extensive research and development. Government programs. But, in subsequent rounds of funding inflated valuation will be normalized resulting in a down round. Equity investors.
Steve Blank
NOVEMBER 2, 2009
In times when venture capital is hard to get, investors extract high costs for failure (down-rounds, cram downs , new management teams, shut down the company.) Marketing demand creation programs (Search Engine Marketing, Public Relations, Advertising, Lead Generation, Trade Shows, etc.)
www.paulgraham.com
APRIL 28, 2010
A lawyer I asked about it said: When the company goes public, the SEC will carefully study all prior issuances of stock by the company and demand that it take immediate action to cure any past violations of securities laws. Down rounds are bad news; it is generally the common stockholders who take the hit.
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