Image via CrunchBase
Fred Wilson once again shows how you use equity to build great companies in his post on the story behind Geocities. It would make a great business plan resource case study if any business school ever gets interested in better understanding the way founders and VCs use equity to build great companies.
It is much easier for VCs to be “free” with equity (you know why?) and much more difficult for the entrepreneurs and founders to make the sacrifice. In the case of Geocities the key founder was already down in the teens of a holding. Fred Wilson and his partner offered the founder a large option pot of 10% if he took Fred’s money.
But as Fred always points out, VCs only do well if they back great founders who build a business. The good news from comments on the post is that the Internet boom of the late 90s is coming round again.
Too late to invest?
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- Yahoo pulls the plug on GeoCities (news.bbc.co.uk)