“Back in the day” (late 1999) I was a part of an investor group that contributed $1 million for a 35 percent ownership stake in a startup technology venture that held a lot of promise (don’t they all?). You can probably guess the next chapter in this story. The tech bubble burst, the NASDAQ dropped 65 percent, technology needs shifted quickly and our company’s outlook changed dramatically within about a year.
Fortunately, we had a great investment banker who was able to arrange a sale of the company and its technology to a public company out of Canada for $1.5 million USD. Our 35 percent equity stake in the company would return only $525,000 of our initial investment, a 50 percent haircut in less than 18 months. Ouch!
To read the full, original article click on this link: How “Investor Preference” Will Help You Attract Funding
Author: Todd Taskey
