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20 results for “equity dilution”
Concept4 mentions across episodes
dilution
...equity. Right? The the equity on your cap table should be owned by those who are pushing the company forward. So if you have a mega fund series b investor who shows up with a 100,000,000, owns 40% of your company, and then vanishes off the face of th
27:34 / 29:03
from transcript27:34 – 29:03
...of equity that are more downside protected. So not swinging for the 20% rate of return per year, but low to mid teens, net rates of return that give you more downside protection, things that look and smell like debt but have enough equity levers to g
56:14 / 57:19
from transcript56:14 – 57:19
...equity is lower because it's so valued. Right? I'm sure they give you a Black Scholes analysis. But net net, the dilution has to be higher. So if a typical startup's doing five to 6% dilution a year, what is a hot AI startup that has more than three
17:13 / 18:16
from transcript17:13 – 18:16
...of dilution over time is huge. On the other hand, you can't avoid it, because you don't wanna hire to speak. No. It's an interesting discussion because, honestly, the least, I would say, enjoyable, least rewarded, but most necessary part of my job as
36:43 / 37:47
from transcript36:43 – 37:47
...is illiquid. While illiquidity may not impact returns directly, it likely helps investors avoid getting in their own way. DALBAR's quantitative analysis of investor behavior consistently shows that public market investors earn far lower returns than
6:05 / 7:06
from transcript6:05 – 7:06
...of that equity. And every time you're taking on on on dilution, you're asking that question of, like, what's the return on that on that allocation? I think a lot of times, the return is, like, it's a 100% towards the person who got on the cap table,
1:28:29 / 1:29:45
from transcript1:28:29 – 1:29:45
...5% dilution these days, but Not that you But they were. They were. And so it's a it's a very it's crazy to think the position that they were in where everyone was looking at Erwin, and he was like, hey. I think this is literally the best path forward
1:02:15 / 1:03:18
from transcript1:02:15 – 1:03:18
...equity play. But because of the way the trust is set up, the family can't sell
1:37:29 / 1:38:45
from transcript1:37:29 – 1:38:45
...equity. Right? That there's Okay. It's you you you convince someone that they're dead equity by convincing them that in the absence of a round, they are at a zero and that they are standing in the way of a round. Right? So you have to basically work
28:26 / 29:31
from transcript28:26 – 29:31
...dilution by buying back stock in order to maintain roughly equal share count. The problem is that the stock price of this CEO's company had soared thanks to the .com bubble and was now overvalued. The CEO recognized this and felt torn. Malbison write
1:03:50 / 1:04:58
from transcript1:03:50 – 1:04:58
...equity and recapitalize good companies and good industries. And the owner will either put in more equity or approach the creditors about exchanging some of their debt for equity. You've seen these cycles in the past, and I'm curious with so much capi
40:30 / 41:33
from transcript40:30 – 41:33
...Private equity is one and a half times. Assuming positive returns over a decade and an ROA above the cost of capital, leverage would boost private equity returns relative to the market. Size. Private equity owned businesses are smaller than those in
5:19 / 6:21
from transcript5:19 – 6:21
“Why 25% founder dilution is the red flag that kills deals”
that's healthy. Beyond that but and obviously, less is even better, but 25% to me is kinda like the cutoff. After that, I started thinking about, like, why why is it so diluted? Yeah. No. I mean, I w
20:54 / 21:33
tactical advice20:54 – 21:33
...dilution. Another reason CEOs buyback stock is to reduce the dilution from options issuance. In his book, Stock Buybacks, The True Story, Ed Yardeni speculates that most stock buybacks are intended to offset the dilution from employees exercising the
28:31 / 29:45
from transcript28:31 – 29:45
as well to bolster the round. And it happens at a 700,000,000 post money valuation. So $1.27 at seven post It's flat. A little down. Down. So the share price is actually down. This is a down round that happens. And this was so hard. I mean, for all o
1:03:44 / 1:04:47
from transcript1:03:44 – 1:04:47
...equity with Citigroup. They did Elevated. They raised common equity. So the Blackstone preferred got converted to common. So the idea is is that the number of shares that he gets paid on goes down as the company gets larger, and that's by design. Tha
27:48 / 28:53
from transcript27:48 – 28:53
...of dilution going on because these are business that need a lot of capital, and they need a lot of great employees. But, again, if the prize is worth it, it'll all pay off. And even with this this comp, they're still leaving in the first year. They'r
40:00 / 41:29
from transcript40:00 – 41:29
...20% dilution here or a Twitter slash x.ai investor rolling into the largest market cap private company on the planet maybe six months before it goes public? I mean, the way I phrase that question makes it clear what the answer is. Superficially be li
5:53 / 7:10
from transcript5:53 – 7:10
because it's a one to one conversion, but you're just foregoing your preferred rights. But we're seeing all kinds of variations on that right now, Right? So you can adjust that conversion ratio. You can say for every 10 shares of preferred, you're on
10:32 / 11:37
from transcript10:32 – 11:37
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