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Unfortunately, I think that ship sails when you take VC funding. Founders that can fundraise and run corporate BD/sales well and/or are experienced can mitigate this by having a stronger hand to bargain with, but it's just unavoidably the case that VC money comes with strings attached. They indemnify themselves differently from debt investors, but as you point out, that comes from liquidation preferences as well as preferred participation and more.

While I would say that it seems probable that many startup employees are young and inexperienced enough that it services the founder to play these games, I'd definitely say that the incentives are definitely in favor of this dynamic. It's unfortunate. I'd prefer solid financials and growth, just like you. The only real way to avoid this kind of game is not to play -- have an independently wealthy founder/stakeholder, or a very close relationship with an angel investment firm that can afford to be long term. It's challenging to find that from people managing Other People's Money.




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