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When an entrepreneur takes on investors who take equity (i.e. The board is where large equity investors get their representation. Founders on the other hand recognize that over time they are likely not to have complete control of the board of directors of the company they founded. VCs most certainly do have skin in the game.
Most of the rounds I participate in today are priced equity rounds. The equity round process bakes this in, and helps every participant to know what they’re raising or holding at any given point, dissuading the company from taking on additional capital without some burden. Payment may be delayed. It is not fair.
Doing better than average requires what Howard Marks of Oaktree Capitalcalled ‘different and better’ thinking in a recent memo to his investors. Being an average investor in startups is therefore a waste of time. It’s actually a surefire recipe for losing money.
What I can tell you is that total private equity assets under management was reported as $2.5 As everyone knows, what is being reported as dry powder isn’t real as many of those LP commitments would not survive a capitalcall (and thus capitalcalls aren’t being made). trillion as late as last month.
million from Lighthouse Capital Partners , which ultimately became critical to our balance sheet and they turned out to be a great partner as we worked through the equity financing process. Some were also dealing with issues of limited partners struggles with capitalcalls and asset allocations. We drew $1.5
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