Picture this: you’re an angel investor who bought a 10% stake in the next Google’s pre-seed round. About a year later, the company begins raising its seed round. Other investors see the same potential in the company that you did when you first invested and the deal heats up. A big venture capital firm fills the entire round, diluting your stake in the company significantly. You now own 3% of the company and have significantly less control over company matters. You had little say in this happening despite being one of the first people to believe in the company and invest when few others were willing to take on the risk.
Excellent considerations from investor and offerer points of view. Thanks for the thought provoking article.