Bill Gurley

So if anything, they have the reverse incentives to get them right.

It's a great question.

I think there's two things that fight against that.

One, every founder I know has multiplied their percentage ownership times whatever the highest price their company was ever valued at and thought about that number as their net worth.

I say that without judgment.

I think it's natural that you would do that.

But then taking that number down by 70% or whatever is tough to do.

And then the other issue is, quite frankly, the lick preference.

And so this is another technicality.

So I'll explain it for the listeners.

But

The amount of money you raise in aggregate, just the raw number becomes your LIC preference.

And in M&A outcomes, the investor can choose to take the LIC preference and not convert to common so they can get their money back.

And so if a company's raised $300 million and they're worth $2 billion, Lickpref doesn't matter that much.

If the valuation is now $400 million, then the Lickpref could take 75% of the company in a sale.

And that's a real issue out there for people.

Well, I have to admit, I haven't done a statistically significant survey, which might be interesting for someone to do.

And maybe there's someone at a fund of funds or someone at PitchBook or someone at Carter that might be able to come up with that.

I'll tell you, it's a lead in to what I think happened.

So we were in the middle of a very long zero interest rate period, which I think the acronym ZERP is used now for that window.