Finance, Pay to Play and Syndication

Search:

DAY

WEEK

MONTH

YEAR

Select your country:
Sign up | Log in

Finance

Pay to Play

Syndication

Why LP’s Passed on Seed Funds 10 Years Ago (And What’s Happened Since)

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.

Dilution

Dilution Later Stage Portfolio Technical Review

The Silliness Of Recapping Seed Rounds

Feld Thoughts

JULY 14, 2015

Assuming equity is raised at or above that cap, the total dilution, before the new money, is 16.6% (equivalent to an equity financing of $1m at a $6m post money valuation. A company raises $1m of seed money from angels in a convertible note with a $6m cap. The company spends the $1m building and launching their first product.

Recapitalization

Recapitalization Pre-Money Valuation Post-Money Valuation Angel Investor

StartUpRoar

Why LP’s Passed on Seed Funds 10 Years Ago (And What’s Happened Since)

The Silliness Of Recapping Seed Rounds

Stay Connected