Double Up!
So here is a suggestion to the community. Always allow the entrepreneur to invest along with each round in preferred stock. I’ve seen this used sometimes and forbidden other times. It should always be an option on the table. If i was an entrepreneur, I would insist on this upon on our angel round so every $ put in by the entrepreneur is worth as much as a $ by the investor. Sweat Equity = Common Stock. Cash should = Preferred since a $ should be a $. Unfortunately, this isn’t the case a lot of the time. This is why some companies can grow big, sell for a lot, entrepreneur put in a lot of $ but barely got anything out. $1 should = $1. I’m sure a lot of people will disagree with me on this one.
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