Always a good time when the tables are turned and VCs have to pitch to Founders. Thank you to the Pitchflix team for having Zong Xi represent Cocoon Capital at your inaugural Rev event in Singapore. It was an incredibly well run event with a good mix of Founders in attendance. Looking forward to attending future editions!
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Why it needs us in the European venture landscape and much more around culture and creative tech in the latest podcast episode of EUVC . 🎨 🤖
Yes, I do believe that the Cultural and Creative Industries are overlooked in the tech world. That's why I'm building New Renaissance Ventures. 🎨 🤖 It was great to discuss this and the broader world of culture and creative tech with my fellow panelists: Oliver, Founding Managing Partner at Speedinvest Hazel, Angel Investor and VP of Music Intelligence at SoundCloud Uli, Managing Director of Axel Springer Digital Ventures Thanks to Andreas from EUVC for hosting us, it was a lot of fun! 💙
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I’ve often been sent, discussed, and reminded of the story of how the founders of FanDuel ended up with $0 and no equity after their company’s buyout. It’s a sobering reminder of the murky waters small business owners—especially in defense tech—can face. While having strong legal counsel is essential in every meaningful negotiation, it can be incredibly challenging to hold your ground when the big players come calling. This story serves as a cautionary tale: always protect your interests, know your worth, and ensure your voice is heard, no matter how loud the other side may be.
Building something new | Ex Y Combinator Visiting Partner | Co-founded Arcus (sold to Mastercard)
They sold their company for $558M, but wound up with $0 😱 FanDuel’s sale might seem like a success, until you learn its founders and employees walked away with nothing. WHY? Investor-friendly terms like liquidation preferences and drag-along rights prioritized late-stage investors, leaving little for common shareholders. What founders can learn: 1. Read the fine print: Terms like liquidation preferences and drag-along rights can strip you of profits and control. 2. Raise responsibly: Over-raising inflates valuations and may create unsustainable pressure for returns. 3. Pick the right investors: Not all capital is equal—align with those who share your long-term vision. 💡 FanDuel’s story is a stark reminder: building a great company is one thing, protecting your stake is another. VC funding isn’t always the success it seems; it often brings intense pressure for rapid growth. Ask yourself: is VC the right path for our growth, or should we consider alternatives like organic growth to profitability? Thank you to Hugh Mooney for posting this.
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Founders should prioritize a longterm business growth strategy and self funding over short term liquidity and unsustainable exit strategies.
Building something new | Ex Y Combinator Visiting Partner | Co-founded Arcus (sold to Mastercard)
They sold their company for $558M, but wound up with $0 😱 FanDuel’s sale might seem like a success, until you learn its founders and employees walked away with nothing. WHY? Investor-friendly terms like liquidation preferences and drag-along rights prioritized late-stage investors, leaving little for common shareholders. What founders can learn: 1. Read the fine print: Terms like liquidation preferences and drag-along rights can strip you of profits and control. 2. Raise responsibly: Over-raising inflates valuations and may create unsustainable pressure for returns. 3. Pick the right investors: Not all capital is equal—align with those who share your long-term vision. 💡 FanDuel’s story is a stark reminder: building a great company is one thing, protecting your stake is another. VC funding isn’t always the success it seems; it often brings intense pressure for rapid growth. Ask yourself: is VC the right path for our growth, or should we consider alternatives like organic growth to profitability? Thank you to Hugh Mooney for posting this.
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#founders Here is a good cautionary tale. When it comes to raising capital please learn from those who went before you!
Building something new | Ex Y Combinator Visiting Partner | Co-founded Arcus (sold to Mastercard)
They sold their company for $558M, but wound up with $0 😱 FanDuel’s sale might seem like a success, until you learn its founders and employees walked away with nothing. WHY? Investor-friendly terms like liquidation preferences and drag-along rights prioritized late-stage investors, leaving little for common shareholders. What founders can learn: 1. Read the fine print: Terms like liquidation preferences and drag-along rights can strip you of profits and control. 2. Raise responsibly: Over-raising inflates valuations and may create unsustainable pressure for returns. 3. Pick the right investors: Not all capital is equal—align with those who share your long-term vision. 💡 FanDuel’s story is a stark reminder: building a great company is one thing, protecting your stake is another. VC funding isn’t always the success it seems; it often brings intense pressure for rapid growth. Ask yourself: is VC the right path for our growth, or should we consider alternatives like organic growth to profitability? Thank you to Hugh Mooney for posting this.
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Independent Board Member | Venture Growth Catalyst | Startup Cofounder-Investor-Advisor | Leading for Business & Society | Aligning People, Priorities & Processes | Strategy & Finance | AQP
For VC-backed founders and early investors, high value exits aren’t always the success they seem. In this example, VC liquidation preferences and drag along rights meant that the founders ended up with nothing. Thank you for sharing Edrizio De La Cruz.
Building something new | Ex Y Combinator Visiting Partner | Co-founded Arcus (sold to Mastercard)
They sold their company for $558M, but wound up with $0 😱 FanDuel’s sale might seem like a success, until you learn its founders and employees walked away with nothing. WHY? Investor-friendly terms like liquidation preferences and drag-along rights prioritized late-stage investors, leaving little for common shareholders. What founders can learn: 1. Read the fine print: Terms like liquidation preferences and drag-along rights can strip you of profits and control. 2. Raise responsibly: Over-raising inflates valuations and may create unsustainable pressure for returns. 3. Pick the right investors: Not all capital is equal—align with those who share your long-term vision. 💡 FanDuel’s story is a stark reminder: building a great company is one thing, protecting your stake is another. VC funding isn’t always the success it seems; it often brings intense pressure for rapid growth. Ask yourself: is VC the right path for our growth, or should we consider alternatives like organic growth to profitability? Thank you to Hugh Mooney for posting this.
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Northrop Grumman | Mission Systems | Sensors & Systems | Former U.S. House of Representatives Appropriations Committee | Department of Defense Legislative Affairs | Intelligence Community (opinions expressed are my own)
500x in 22 years
Chief Investment Officer & Member of the Executive Committee at Syz Group ¦ 200,000+ followers
On this day in 2002: #Netflix went public. $2,000 invested in the IPO would be worth $1 million today. Source: Jon Erlichman
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Many when hearing all those high valuations and exit numbers assume that founders hit the jackpot and that $558M goes straight to their bank account ... Is it? FanDuel shows a different picture ... The company was sold for $558M leaving founders with nothing ... this is extremely sad ... How did this happen? 𝗟𝗶𝗾𝘂𝗶𝗱𝗮𝘁𝗶𝗼𝗻 𝗣𝗿𝗲𝗳𝗲𝗿𝗲𝗻𝗰𝗲𝘀 resulting in investors' money prioritized over common shareholders, which included the founders. 𝗗𝗲𝗯𝘁 𝗢𝗯𝗹𝗶𝗴𝗮𝘁𝗶𝗼𝗻𝘀, which had to be repaid before any equity holders. 𝗗𝗶𝗹𝘂𝘁𝗶𝗼𝗻: Here is again when we see in the news company X, Y, Z raised millions, we celebrate (as we should!) but we have to be careful with how each round impacts the founders' ownership.
Building something new | Ex Y Combinator Visiting Partner | Co-founded Arcus (sold to Mastercard)
They sold their company for $558M, but wound up with $0 😱 FanDuel’s sale might seem like a success, until you learn its founders and employees walked away with nothing. WHY? Investor-friendly terms like liquidation preferences and drag-along rights prioritized late-stage investors, leaving little for common shareholders. What founders can learn: 1. Read the fine print: Terms like liquidation preferences and drag-along rights can strip you of profits and control. 2. Raise responsibly: Over-raising inflates valuations and may create unsustainable pressure for returns. 3. Pick the right investors: Not all capital is equal—align with those who share your long-term vision. 💡 FanDuel’s story is a stark reminder: building a great company is one thing, protecting your stake is another. VC funding isn’t always the success it seems; it often brings intense pressure for rapid growth. Ask yourself: is VC the right path for our growth, or should we consider alternatives like organic growth to profitability? Thank you to Hugh Mooney for posting this.
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Very important lesson for any founder - think long and hard to whom and for what you give equity.
Building something new | Ex Y Combinator Visiting Partner | Co-founded Arcus (sold to Mastercard)
They sold their company for $558M, but wound up with $0 😱 FanDuel’s sale might seem like a success, until you learn its founders and employees walked away with nothing. WHY? Investor-friendly terms like liquidation preferences and drag-along rights prioritized late-stage investors, leaving little for common shareholders. What founders can learn: 1. Read the fine print: Terms like liquidation preferences and drag-along rights can strip you of profits and control. 2. Raise responsibly: Over-raising inflates valuations and may create unsustainable pressure for returns. 3. Pick the right investors: Not all capital is equal—align with those who share your long-term vision. 💡 FanDuel’s story is a stark reminder: building a great company is one thing, protecting your stake is another. VC funding isn’t always the success it seems; it often brings intense pressure for rapid growth. Ask yourself: is VC the right path for our growth, or should we consider alternatives like organic growth to profitability? Thank you to Hugh Mooney for posting this.
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They sold their company for $558M, but wound up with $0 😱 FanDuel’s sale might seem like a success, until you learn its founders and employees walked away with nothing. WHY? Investor-friendly terms like liquidation preferences and drag-along rights prioritized late-stage investors, leaving little for common shareholders. What founders can learn: 1. Read the fine print: Terms like liquidation preferences and drag-along rights can strip you of profits and control. 2. Raise responsibly: Over-raising inflates valuations and may create unsustainable pressure for returns. 3. Pick the right investors: Not all capital is equal—align with those who share your long-term vision. 💡 FanDuel’s story is a stark reminder: building a great company is one thing, protecting your stake is another. VC funding isn’t always the success it seems; it often brings intense pressure for rapid growth. Ask yourself: is VC the right path for our growth, or should we consider alternatives like organic growth to profitability? Thank you to Hugh Mooney for posting this.
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