Inside Round…a last resort
Nov 08
Private Equity, Startup, Valuation, Venture Capital Conflict of Interest, Inside, Investment Round, Outside, Rule of Thumb, Valuation No Comments
As a general rule, firms will only raise an inside investmetn round if they cannot raise an outside round. An inside round means that the entreprenuer only raises capital from the investors in the previous round. This situation raises a serious conflict of interest around the valuation of the round since there is not any objective 3rd party to set the new valuation.