Cram Down – A Test of Character for VCs and Founders
Steve Blank
APRIL 26, 2022
They offered desperate founders more cash but insisted on new terms, rewriting all the old stock agreements that previous investors and employees had. For existing investors, sometimes it was a “pay-to-play” i.e. if you don’t participate in the new financing you lose. Founders rationalize it’s good for their employees.
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