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The Series B Trap – And How to Avoid It - Altos Ventures

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We are privileged to invest on behalf of institutional investors, most with charitable, educational, or non-profit missions. Serving entrepreneurs is a calling for us, and we look to partner with companies with an equally strong sense of purpose.

The original version of this post was published in PandoDaily on January 20 2014 Over the last two years, much has been made of the “Series A Crunch”, a steep drop off in the number of seed-funded companies that are able to close an institutional Series A financing. For the companies that make it that far, there is another financing pitfall – something I call the “Series B Trap”. This one is just as fatal and even more heartbreaking because it is highly likely yet entirely avoidable. I’ve been a part of it as entrepreneur and investor, and my experience was confirmed reading an old Fred…

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