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Remove Entrepreneur Remove Liquidation Preference Remove Reputation Remove Seed Capital
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Startup Fairy Tales and Other Tall Tales That Venture Capitalists Tell

Growthink Blog

MAY 23, 2011

An entrepreneur starts a company in classic " bootstrap " fashion - with a combination of sweat equity and their own financial resources. The angel then introduces the entrepreneur to his or her wealthy friends and business connections who, based on the good reputation of the referring angel, also invest.

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Angel Investor Venture Capital Sweat Equity Cram Down 112
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The Silliness Of Recapping Seed Rounds

Feld Thoughts

JULY 14, 2015

It usually happens in a later round, when the company is in fact worth much less than the liquidation preference overhang and insiders use a pay-to-play and a low valuation to reset the preferences and the cap table. And developing a reputation for recapping seed rounds is, in my book, silly.

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Recapitalization Pre-Money Valuation Post-Money Valuation Angel Investor 70
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