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Some Thoughts and Models Around Ownership Targets

This is going to be BIG.

If you’re a first check lead VC for pre-seed rounds in New York, you can keep your head on when it comes to price, but in SF if you’re trying to fund companies from YC, good luck with your price discipline. It doesn’t take into consideration options, down rounds, or recaps. Here’s a very plain vanilla model.

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Why is there such a large founder to early employee equity drop-off? - Quora

www.quora.com

Even if your company succeeds, there is absolutely no guarantee your equity will not be wiped out in a down round. Even better, executives will negotiate the acquisition price of their company down; in exchange for a larger amount of post-acquisition retentio n equity and accelerated vesting.

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