The Next Web

SEPTEMBER 29, 2013

The Founder’s gut wrongly tells them their business plan has been validated because they received an investment. You have to execute the business plan without executing yourself. With the lower evaluation, all the initial investors and the founders will be crammed down and lose a good portion of their equity.

Metrics 136

Metrics Cofounder Cram Down Liquidity Event 136

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.) Sales people cost money, and when they’re not bringing in revenue, their wandering in the woods is time consuming, cash-draining and demoralizing.

Lean 244

Lean Silicon Valley Startup RSS 244

Tim Keane

AUGUST 20, 2009

"  The problem has been that too-high valuations and too generous terms have spawned painful down rounds that squash the entrepreneur and his early investors.    New money, usually VC money, comes in and crams down those early investors and takes substantial shares from the entrepreneur. 

Milwaukee 60

Milwaukee Bootstrapping Cram Down Deal Structure 60