> Equity investments like this don't need to be repaid
You are saying equity is not bonds.
However investors expect to be repaid in the future with control and exhorbitant interest rates (based on risk). VC invests to make money, but that money comes from future equity rounds or IPO.
If you didn't take the VC money (and the business achieved the same growth without the money) then you'd expect you would have been better off by at least the amount invested (investors don't invest with the expectation of only getting their money back).
If the business doesn't succeed then you are on the hook to pay the debt from your equity via liquidation preferences.
VC payment is expectation statistics, but the investors know that game and invest to make money. That money comes from the current equity owners making less in the future.
Not only the "expectation" but lots of VCs have preference built in that guarantees them huge returns on basically any liquidity event. It's probably not as likely in a Series C like this but 2-3x preference is not unheard of. There are few investment vehicles where for every $1 you put in you're guaranteed to get the first $3 made back first.
You are saying equity is not bonds.
However investors expect to be repaid in the future with control and exhorbitant interest rates (based on risk). VC invests to make money, but that money comes from future equity rounds or IPO.
If you didn't take the VC money (and the business achieved the same growth without the money) then you'd expect you would have been better off by at least the amount invested (investors don't invest with the expectation of only getting their money back).
If the business doesn't succeed then you are on the hook to pay the debt from your equity via liquidation preferences.
VC payment is expectation statistics, but the investors know that game and invest to make money. That money comes from the current equity owners making less in the future.