Signaling risk typically happens when a large fund comes into an early round, creating an expectation in the market that they will lead the next round. For instance, if a $1B firm puts in $1M into a seed, chances are they are looking to increase their ownership in the future. At Tau we strongly believe in the traditional approach of entrepreneurs raising from smaller guys early and from larger guys later. But there are definite pros to engaging early and there are some ways to mitigate the cons, which are the two threads this article will explore. 1) All Types…...
Signaling Risk? How Early Startups Can Work Best With Big Funds
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