Nov
1
There’s a depressing story on TechCrunch about a little startup called 5min.com who gave away 50% of their company in an angel round. This is the worst deal I’ve ever heard of.
The expression “you could own a piece of something big or a big chunk of nothing” applies equally well to Angel investors. When angels behave this way, they leave the founders completely unmotivated and feeling like employees. Right now they’re spending half their time thinking about the next business they’re going to start and they’ve probably already written their first few lines of code.
Here’s the capitalization table from TC. The founders are the first three on the list.
