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teej | 7 months ago

10% is a large drag on the cap table.

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tptacek|7 months ago

If that actually becomes material, they'll offer to buy shares in the next round. That's the point at which this whole conversation becomes interesting; right now, it's complexity for its own sake.

I know the feeling! I left a company some years back in a complicated way, and my instinct was to drill in as well. It seems like a big deal! It really isn't, though.

apparent|7 months ago

Or they'll find a way to dilute the co-founder's shares so they don't have to buy them out.

takklz|7 months ago

This is a joke right? Seed investors will get 10-30% of a company for under a million dollars which will be blown through in less than a year. That’s means they’re a drag on the cap table right?

umeshunni|7 months ago

What does that mean?

tptacek|7 months ago

That theoretically future investors will be reluctant to invest because the founder 10% is crowding out equity that could otherwise be used to attract key performers down the line.