Even if founders are wiped out, they are usually still paid as consultants (or employees) at the acquiring company to help facilitate the transition. Compensation for these arrangements are often (well) above market in order to incentivize the founder to stay long enough to facilitate the transition.
But yea, in general if a company is bought for less than they raised in VC, the returns usually aren’t huge.
Comments
Even if founders are wiped out, they are usually still paid as consultants (or employees) at the acquiring company to help facilitate the transition. Compensation for these arrangements are often (well) above market in order to incentivize the founder to stay long enough to facilitate the transition.
But yea, in general if a company is bought for less than they raised in VC, the returns usually aren’t huge.
thanks!