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Small Investors

ithacaVC

The treatment of the friends, family and angels (FFA) as the startup matures and raises larger rounds of financing over time is interesting. 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).