I am a founder of a startup with 10% shares. We are in the stage of Series A financing. The valuation of the VC is pretty low according to me. Also the option pool that VC is demanding from us (common shareholders) is about 22%. Other common shareholders are willing to accept this offer, because they believe this will move the company to another league and eventually this may end up an IPO and even though the dilution is huge, we will get a better return in the end.
My questions are:
- What happens if I do not accept these terms?
- If I accept this Series A funding, at the stage of Series B (which will be in 14-16 months) will I keep the right not to accept Series B funding, or will I lose that control when my shares drop to 4%?