Timing: 12:20 PM to 12:50 PM
Smart Investment on High Tech Startups
The real news behind these deals is not only do the company founders end up making a nice chunk of change, but all of the investors that carried them to the acquisition point make out handsomely as well.
As startups get going they need cold hard cash — capital — in order to pay expenses and keep them afloat while they build the next greatest service, product, or app. This funding is initially provided from savings or perhaps some friends and family. As time rolls on they need more cash to keep on with the idea and begin to a raise a series of investments in rounds in order to continue on.
As the startups begin taking on investors they have to give up equity or ownership in the company in order to attract that investor. No one is going to just give you money without getting anything in return.