View from Seed
JANUARY 13, 2021
It’s that when things go south, seed funds will have a hard time defending themselves against larger funds that might do a recap or put in a pay-to-play. When we have been converted to common or very deeply diluted from a pay-to-play, the companies have either failed anyway or were not blockbuster outcomes.
Babbling VC
AUGUST 27, 2010
The concept of "pay-to-play" hadn't quite sunk in with him. Ultimately, the company was forced into bankruptcy as the investor syndicate couldn't come to terms on time. Yet, he wanted all the rights as if participating in the round. So, after pissing off management, he started pissing off his co-investors.
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 the investors, who put up $1m in a convertible note, get 0.1%. Sure – it happens.
Expert insights. Personalized for you.
399 
Let's personalize your content