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Ten questions the entrepreneur should ask the (prospective) investor

Tim Keane

If the investors ideal size is smaller than your need, you ought to ask about syndication. If they don’t like to syndicate, or don’t have a track record of doing it, you will want to consider your options. Common stock is a vehicle for sharing risk equally with insiders who have more knowledge and ability to affect business results.

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How to Fund a Startup

www.paulgraham.com

Some angel investors join together in syndicates. Some VCsnow require that in any sale they get 4x their investment backbefore the common stock holders (that is, you) get anything, butthis is an abuse that should be resisted. Theres only common stock at this stage. Startups valuations aresupposed to rise over time.