Mar 3, 2014

"Price Protection" in Venture Capital Financings: What Entrepreneurs Should Know

Venture capital investors are not like the rest of us. When regular folks buy a share of stock and the stock subsequently trades for a lower price, they take their losses. All of them. When a venture capitalist buys a share of stock, and the company subsequently sells shares at a lower price, the venture capitalist doesn't usually feel the full loss. Sometimes, the VC doesn't take any loss at all. Welcome to the world of "price protection."
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