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General Discussion & Feedback => Just Chat! => Topic started by: scientizscht on 21/06/2019 23:52:08

Title: Is it possible two competitor companies to fund the same startup?
Post by: scientizscht on 21/06/2019 23:52:08

Is it possible two competitor companies to fund the same startup?

Title: Re: Is it possible two competitor companies to fund the same startup?
Post by: evan_au on 23/06/2019 00:13:18

Yes.

But from what I have heard, "Angel Investors" are a fairly cooperative lot. They are aware that they are taking a big risk (with potential big rewards), and so they are happy for other Angel Investors to contribute to the startup costs. They often pass on leads to other investors. That allows all of them all to diversify their portfolio, spreading the risk and reducing uncertainty in the profit/loss.

Faced with a compelling startup, large corporations often buy a startup outright (along with their patent portfolio). That way they don't have to share control with anyone else.

In between, competing companies can each buy a large block of shares, enabling them to appoint a director or two.