- Deliberately Under-financing
Another age-old trick of venture capitalists is deliberately providing less money than is needed. Then the company grows, needs more cash fast, and has to go back to the venture capitalist to beg for it. The venture capitalist provides the money reluctantly on bad terms that give the venture capitalist more equity and more control - but again he or she provides less than is needed and again, the company has to come back for another rape. After a few cycles of this, the venture capitalist has almost everything and the entrepreneur almost nothing.
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