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> First, if you raise $36M, getting acquired for $100M could very well mean next to nothing for common stock holders.

The operative word here is "could". It also "could" mean they make $60M.



I'm not a finance guy, are you saying that the funders of the $36MM could have done so for a basically even money return on exit?


The terms could be literally anything. The grandparent was assuming that the VCs have 3x participating preferred. I won't say that's unlikely, since I've never seen a Series B or C term sheet, but those are gone from decent Seed Term sheets and I believe good Series A term sheets.

So you have to ask, how could a sale happen for $100M with a $36M investment. There are two options: the VCs agreed, or they didn't need the VC's permission. In the latter case, the common would almost certainly do well. But there are situations where the former could happen too: if the company was worth much less and they just felt now was the time to sell.


If you raised $36MM on a $300MM valuation I would guess that is possible.




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