And not only does she have to pay $300M – she didn’t even get the $175M that JPM paid. A lot of that — the majority most likely — went to her investors.
That’s not how it works in venture. Investors want to be rewarded immediately. There might be an earn-out, but it’s relatively minor as compared to the purchase price – maybe 10% to 25%. And just as often, it’s not an…
She never had the full proceeds in her possession. Remember, she had investors. She was venture-backed startup. She likely only had somewhere between 10% and 25% of the equity at the time that she sold the company.
And not only does she have to pay $300M – she didn’t even get the $175M that JPM paid. A lot of that — the majority most likely — went to her investors.
That’s not how it works in venture. Investors want to be rewarded immediately. There might be an earn-out, but it’s relatively minor as compared to the purchase price – maybe 10% to 25%. And just as often, it’s not an…
She never had the full proceeds in her possession. Remember, she had investors. She was venture-backed startup. She likely only had somewhere between 10% and 25% of the equity at the time that she sold the company.