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20VC: Why Small Markets are Better Than Big Markets, The Biggest Delusion of Early Stage VC, Why AI Investing is like a Horserace and Why The Most Ambitious Companies Growing the Fastest are not the Best Investments with Adam Fisher, Partner @ Bessemer
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
Challenges and Impact of Down Rounds in Startups
The strength of different shareholder classes determines whether a company will face a recap opportunity or a sale at a depressed price. Entrepreneurs and investors may not realize the severity of this situation, especially when valuations are in exit territory or far exceeding it. Down rounds can be fundamentally fatal to company morale and progression, making it extremely hard to recover. While public company CEOs may not understand the implications of a down round, being honest and transparent with employees about the situation is crucial to navigate through it. Additionally, the concern in down rounds is often not the price, but the large amount of money being raised.
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