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Saastr

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No, There Aren’t That Many Deals Where the VCs Make Millions and The Founders Make Nothing

  • Liquidation preferences in venture capital deals may not always result in VCs making a ton of money while founders make nothing.
  • While in theory VCs could take all the money if a startup sells for less than what is raised, it rarely happens in practice.
  • Founders often receive consideration in acquisitions, and the acquirers want them to stay and continue growing the company.
  • Instead of worrying about VC terms, focus on increasing the valuation of your startup during an exit to ensure everyone benefits.

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