To attract entrepreneurs who want to retain more control over their companies: Pillar will purchase shares of common stock in its portfolio companies, as opposed to preferred stock, the VC way
Reporter: Aviva Lev-Ari, PhD, RN
SOURCE
After spending nearly two decades as a North Bridge investor, Jamie Goldstein said he launched Pillar with the idea of upending the traditional venture capital structure to make the relationship between founders and investors more equitable and transparent.
To that end, Pillar will purchase shares of common stock in its portfolio companies, as opposed to preferred stock, a class of stock that is ubiquitous in startup investing. Preferred stock often includes clauses like anti-dilution rules that tend to favor venture capitalists over the businesses and entrepreneurs they’re investing in.
The Boston-based firm’s launch is part of a broader “founder-friendly” shift among investment firms to attract founders, as more entrepreneurs weigh the costs of ceding control over their companies to venture capitalists intent on making big returns.
He said Pillar aims to make first-round investments in companies in the areas of big data, machine learning, artificial intelligence, health care and information technology, with a preference toward founders who run their own businesses.
SOURCE
2012pharmaceutical
sjwilliamspa