2min chapter

Startup School by Y Combinator cover image

Understanding Safes and Priced Equity Rounds by Kirsty Nathoo

Startup School by Y Combinator

CHAPTER

What if You're Not Crazy and Sell 85 % of Your Company?

The question is, what happens if you go crazy and sell 85 % of your company? That ya. I that the founders can raise too much money on too low ation caps. When thy're raising on convertible instruments, they don't realize how much dilution they're taking. And then they get to their priced round, and they look at the cap table and they're just like, what? They only own 10%. So there's not a huge amount you can do at that point,. Because you've already entered into the contracts with the investors to to do this. It's important to not get into that situation in the first place.

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