Failure to account for any additional rounds of financing and its accompanying dilution in order to meet projected earnings will result in the investor not receiving an adequate number of shares to ensure the required percent ownership at the time of exit.

Question

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If an investor does not account for additional rounds of financing that may dilute their ownership percentage, they may end up with fewer shares than they anticipated at the time of exit, which could result in lower returns or even a loss on their investment.

Failure to Account for Any Additional Rounds of Financing and Its