Minority investors are key players in a startup’s cap table, but they are often overlooked. There are four main archetypes of minority investors: Ghosters, Promisers, Drivers, and Mavericks. Founders should weight the risks and rewards of each archetype when shaping their cap table. There are two tried-and-true strategies for discerning an investor’s archetype: conducting reference checks and requiring investors to demonstrate their value before accepting their investment. It is crucial to invest extra time upfront to ensure that minority investors bring exponential rewards to the company rather than growing into exponential risks.
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