Remove Dilution Remove IPO Remove Preemptive Right Remove Stock

Small Investors


If FFAs only invest at the beginning and do not make any follow on investments as the company raises more $$ then the only real way FFAs make money when the company is ultimately sold is if the company keeps raising future rounds at higher and higher valuations (and IPO exit may provide upside if the stock price increases over time after the IPO). In this situation, the FFAs are diluted from an ownership percentage, but enhanced economically.