> Founders should approach every fundraising as an auction.
I agree. So what's the auction marketplace of startup fundraising - a place where every deal can be posted publicly, or as close to that as possible?
I agree. So what's the auction marketplace of startup fundraising - a place where every deal can be posted publicly, or as close to that as possible?
https://henrysward.medium.com/finally-a-private-stock-exchan...
Once we have a liquid and active market for our shares, (in our case we have enough liquidity to support ~ $100M of volume per quarter), when we want to raise primary capital we simply sell common shares out of treasury.
This is powerful for a couple of reasons. First, we get better price discovery on CartaX than going door-to-door on Sand Hill Road. Second, all shares bought on CartaX are common stock. There is no preferred stock, board seat, or covenants to deal with in a primary.
But perhaps most importantly, CEOs and CFOs don’t have to spend months raising money, doing roadshows, meeting with investors, and negotiating termsheets.
Other than that, it doesn't exist. Got some thoughts on this part of the dynamic in the works.
That said, 'auctions' for accredited investors already exist, if the company choose to take advantage of it. There are seed funding sites as well as AngelList, etc., to publicize deals.
Some founders also choose not to publicize a raise (except among the VC/angel networks) so as to remain under the radar until they are ready to launch.
You mean their second or third homes, right? There's a minimum net-worth requirement before you're able to invest in a startup so a failed investment is not going to bankrupt any investors. The founders are much more likely to end up in the poorhouse if things don't work out than investors are.
I agree with you; it is a good thing that there are accreditation requirements to invest in as risky an investment as a startup. Getting rid of that would be an awful idea. That was the point of my comment.