That's crazy if it happens because VCs conceal the terms of their deal, or offer exploding deals that don't leave time for due diligence.
On the other hand, it's not crazy if the board knowingly accept those terms. If they do, it's because there weren't better terms to be had somewhere else. All of these terms have a dollar value. The more onerous the terms, the lower the implied valuation of the company.
On the other hand, it's not crazy if the board knowingly accept those terms. If they do, it's because there weren't better terms to be had somewhere else. All of these terms have a dollar value. The more onerous the terms, the lower the implied valuation of the company.