Mobile photo sharing app Color just announced it raised $41 million in funding from marquee investors, Sequoia and Bain.
That's a lot of money for a pre-launch startup.
But actually, the raise makes plenty of sense.
The most important thing to remember is that Sequoia and Bain almost certainly bought preferred shares.
That means they will get the first $41 million dollars back in any sale of Color.
Considering Color has, right now, $41 million cash in the bank, it's almost a certainty that the startup will sell for at least that much money.
What's more, the guys behind the app have a strong track record of building and selling companies. They make money for VCs, so from that perspective it's not a massive risk for the investors.
Don't Miss: A Tour Of Color, The $41 Million App Everyone Is Freaking Out Over
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See Also:
- JOHN BATTELLE: Here's Why Color Matters: Augmented Reality And Nuanced Social Graphs May Finally May Come of Age
- Take A Tour Of Color, The $41 Million App Everyone Is Freaking Out About
- How The #*&% Did Color Raise A Crazy $41 Million For Its First Round?
Why It's Not That Crazy To Give A Startup $41 Million Pre-Launch (AAPL, GOOG)
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