Rumor has it that Israeli video startup 5Min, which has user-uploaded “how to” videos, has raised another $5 million in cash, from Spark Capital.
Ouch! How Not To Do An Angel Round
The company previously raised $300,000 in angel funding. For those entrepreneurs who are curious about the economics of angel rounds, the details around 5min are interesting. In their case, it was ugly. An Israeli (print) magazine called Globes recently got their hands on the capitalization table of 5min and published the details. The angels ended up with nearly half the company for that $300k, leaving the three founders (the first three on the list) and all other employees to split the rest.
It’s rare that this kind of information about a company is published publicly, but it shows how angels can squeeze a company if they have the negotiating leverage.