[dineshp2]

> at least some of this money will be used to pay off initial investors with a nice profit.

To clarify, do you mean some of the money will be used to buy back shares from early investors giving them a nice profit?

[atiffany]

The money being invested by new investors is being exchanged for shares of the company. Rather than creating new shares, at least some of these shares are likely coming from existing investors who bought them at a lower price at an earlier time.

[williamscales]

Why would you assume that? Typically the company would just issue a new series of preferred stock.

[mikeryan]

I'm not sure thats entirely true typically a late round of funding will be some combination of folks taking money off the table and new stock.

There's nothing very "typical" about a 850M raise at 30B. But Groupon infamously raised "Like, A Billion Dollars" of which only about 15% went into the company.