Seed investors should price rounds rather than using small-discount SAFEs
Chris Douvos · Chris Douvos – The LP's Perspective from Ahoy Capital, Venture is Eating the Investment World 2 (Capital Allocators, EP.230) · Jan 10, 2022 · at 21:35
Ahoy Capital's Chris Douvos criticizes the trend of early-stage investors using uncapped or low-discount SAFEs.
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“It used to be 20%. Now we're hearing about a lot of 15% discount saves, and it's like, holy smokes, you're putting the riskiest dollars that are ever going to go into that company in for a very modest return. Now you're on the cap table, and you can put more money in later, so maybe you're buying it as an option, but holy smokes, that round should be priced. Like, don't Kick the pricing can down the road. Price that around and get compensated for the risks you're taking for crying out loud.”
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