Very good article thanks -- why am I not surprised? :-) Few minor points. Sometimes, not often, your initial valuation may affect the subsequent rounds (they shouldn't but may). Crowded cap tables are also problematic. Initial employees contributions, however small, will entitle them to more shares that the later ones -- which may cause discontent. Finally think about how many 6.7% you can give up?
I am not even going to get into option analysis; talk about introducing non-linearities. But even in a linear stream Paul's footnote that YC combinator brings to table a lot more than 6.7% (?) is probably correct, but it should also take into account the effects of the multiplier of the later rounds and options on both side.
I am not even going to get into option analysis; talk about introducing non-linearities. But even in a linear stream Paul's footnote that YC combinator brings to table a lot more than 6.7% (?) is probably correct, but it should also take into account the effects of the multiplier of the later rounds and options on both side.