[lumost]

That assumes that the company proceeds through successive rounds with an upwards trajectory. If the company falters and takes a down round the initial investors may disagree with the direction or even sue.

If the company needs to be recapitalized or restructured under a time crunch, tracking down 100 loosely involved investors and getting them to sign the deal may not be feasible.

[sharemywin]

Probably would have been better to have arbitration instead of lawsuits written into the law. (to make it work not for investors)