[SandersAK]

The reason there is not a lot of dialogue around this is because the numbers don't work for all parties at the right time.

When you have a small founder team, you need capital for essentially nothing to show. You can't raise that capital selling the $170M exit dream to angels or a fund.

Conversely, VCs are assuming a 10% or less success rate across their portfolio. And of that, maybe 2-3% of portcos really returning everything.

So they don't have the luxury of shepherding 100 portcos to $170M exits, since in reality, a $1b exit has a similar chance of happening as a $170M exit. Which is to say very very low.

There's no magic sauce, no prime formula, no wizened or sageinvestor. It's a shit show from start to finish. You're best off finding investors who are on the same wavelength as you, and focusing less on whether you hit a home run or a grand slam.

When you get to a place where you're printing cash or whatever, then sure, make sure the math works out for you. But for 99% of all founders, this question never comes, and they spend too much time thinking about it.

[foobiekr]

So in the failure case, very little of it matters, but in the success case the VC industry can be exceptionally predatory - participating preferences, multipliers, etc. etc. etc.

Honestly, it takes no time at all to have clean term sheets and you don't have the option to fix it later.

[halayli]

The challenge is when several stakeholders are not in agreement with the rest.

[latchkey]

Sage advice. Most startups fail, so squabbling over the numbers has always seemed absurd to me. I'd rather see discussion along the lines of "what happens after we do well" because you have no idea of what "well" will be down the line.

[seattle_spring]

Ensuring you don't get screwed in equity agreements isn't "squabbling over numbers." What exactly are you saying is a waste of time?