Company A has 4 founders, each with 25% share and are doing well and valued at say 4m
Scenario 1 An investor wants to enter the game and buys out one founder for 1m No change in company's value of 4m and they go on to the sunset
Scenario 2 An investor wants to enter the game and joins the other 4 founders with 1m cash New equity split is now 20% each and company has 1m cash in the bank, valuing them at 5m with each having a 20% stake
Any exit from this position should allow the assets to be paid out equally to the 5 shareholders
if it is ok for one stakeholder to negotiate to be paid out first a preagreed sum, then it should also be okay for other stakeholders to negitiate to take money off the table during funding.
I don't understand this return money to investors bit. Shouldn't it be share the money equally among all stakeholders.