The phenomenon of “beach money exits” — startup founders accepting large but low-ball offers to sell — is a pertinent threat to venture capital investors, according to VC researcher Matthew Wansley.
“Founders may prefer an exit that would diversify their risk and give them financial security for life — beach money — to the uncertain prospect of even greater wealth later,” wrote Wansley, a professor at Yeshiva University’s Cardozo School of Law, in a forthcoming paper for the Journal of Corporation Law.
Image: Illustration by II
