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Cram Down – A Test of Character for VCs and Founders

Steve Blank

Cram downs are back – and I’m keeping a list. Most existing investors (those still in business) hoarded their money and stopped doing follow-on rounds until the rubble had cleared. Except, that is, for the bottom feeders of the Venture Capital business – investors who “ cram down ” their companies.

Cram Down 417
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Startup Fairy Tales and Other Tall Tales That Venture Capitalists Tell

Growthink Blog

The typical wisdom regarding the appropriate financing course for a new company goes as follows: 1. 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. For most companies, it is simply a non-starter.