

To The "A" Round Go The Spoils - dickersonjames
http://106miles.net/convo/435/to-the-a-round-go-the-spoils

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amilr
I disagree with a key point in this article that postulates that Series A
investors have taken on as much risk as Series B investors.

The mere fact of knowing that other investors - especially if they are large
and famous ones - have already invested in a business by itself reduced your
risk. Having 3 years worth of information about a company vs 2 years worth of
information reduces your risk. There is more to risk than the binary "unproven
business model" vs "proven business model" that the author seem to make it out
to be.

The author's own words: "Having said all that, I believe that it requires a
lot of courage to be the first to invest in an unproven business."

Why? Because there is more risk.

