Geoff, I agree with most of your analysis, but I wouldn't be so harsh on it.
In the capital scenario you outline, if there's a single founder and the prize equity is diluted (a non-dilution right would be getting a bit nasty IMO) the founder has 23% of a business with $25M valuation which is worth over $5M - a substantial amount of value for them to build on and hopefully later realise. Of course, that is very much a best-case scenario with a very strong series A valuation and excellent seed round too. I agree such a large initial investor equity reduces founder upside dramatically. It also makes common scenarios like a lower seed valuation, second seed round (not quite there for series A), etc much more painful to all concerned which may make a business failure more likely in the mid-performance case. Entrepreneurs should look at options like this with their eyes wide open, and have a good look at other options too - diversity is good. I really like startmate, Scale and bluechilli - would like to see all succeed as well as GRIFFIN Accelerator <http://griffinaccelerator.com.au/> which I'm involved in - all four of those options have distinctly different value propositions for entrepreneurs to look at. Cheers, Craig Davis @Craig_A_Davis griffinaccelerator.com.au -- -- You received this message because you are subscribed to the Silicon Beach Australia mailing list. Vist http://siliconbeachaustralia.org for more Forum rules 1) No lurkers! It is expected that you introduce yourself. 2) No jobs postings. You can use http://siliconbeachaustralia.org/jobs To post to this group, send email to silicon-beach-australia@googlegroups.com To unsubscribe from this group, send email to silicon-beach-australia+unsubscr...@googlegroups.com For more options, visit this group at http://groups.google.com/group/silicon-beach-australia?hl=en?hl=en --- You received this message because you are subscribed to the Google Groups "Silicon Beach Australia" group. To unsubscribe from this group and stop receiving emails from it, send an email to silicon-beach-australia+unsubscr...@googlegroups.com. For more options, visit https://groups.google.com/d/optout.