Remove Dilution Remove Founder Remove IPO Remove Preemptive Right

Small Investors

ithacaVC

Founders often raise money from friends and family and other angels. And sometimes founders want to protect the financial interests of FFAs. In this situation, the FFAs are diluted from an ownership percentage, but enhanced economically. If FFAs do not continue to invest and the company hits bumps (again – this is the norm), then the company ends up with unhappy FFAs and the founders feel responsible (understandably so).