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Angels, Dragons and Vultures: How to Tame Your Investors And Not Lose Your Company by Simon Acland

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MANAGEMENT LEVERAGE AND THE “STACK”

I can imagine that while you’ve been reading the section above about the unpleasant consequences of down rounds, one thought has been at the forefront of your mind: “What happens to me in all of this?” If Vultures are trying to crush each other, surely the management team, without significant money to invest, will be torn to bloody pieces between them.

Actually, the management team has more leverage than you might think. This is because new Vultures will only invest in a company if they believe that the management team is relatively content and well motivated. They may relish diluting the early-round investors out of sight and enjoy demonstrating how much smarter than their competitors they are. Nevertheless, ...

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