Today, we’re talking about small investors. Many founders worry about having too many small investors in their seed round.
In my opinion, you should take the money and get your round closed. Most concerns about having lots of investors are easily resolved.
1/ You can group them. Either list everyone under $100k as one line on your cap table spreadsheet or create an entity for them. Angellist even offers a special product for this called roll up vehicles.
2/ These small investors don’t have governance rights. If you’re using a SAFE now and have reasonable lawyers for later rounds, small investors won’t be a problem because they won’t have any authority over the company.
3/ Communication. Most investor conflicts stem from communication issues. If you set the communication expectations with small investors upfront, most issues can be avoided.
