[adventured]

"If you take money too early (and give away a lot of equity), it turns off future investors"

That's dependent on who the early investor is. If you sell 1/3 of your company before product launch, to one of the most respected people in the segment in question, you'll lure talent and capital to your shores.

A prominent early investor lends vast, instant credibility to what you're doing. They share their reputation with you.

Doing a genetics or CRISPR start-up? Sell 1/4 of the pre-product company to George Church and Feng Zhang, get them to be involved in any meaningful manner, and see what happens.

Convince Mark Cuban to buy 20% of your pre-product company. Your profile just instantly skyrocketed. Every media outlet in the US will now take your contact and at least listen to your story. Cuban just lent you a tiny piece of his fame and credibility, other major investors will (under most circumstances) immediately take you more seriously. A similar story would play out with a few dozen other big angel investors (with varying degrees of attention & credibility attached, some investors lend more or less of each).

[DrJid]

I guess a follow up to this is.. if you had a product, could you then convince Mark Cuban to buy 10% instead of 20%? You still get benefit of having Mark Cuban's name alongside your company while still retaining more of it.

Plus, that 10% can then go to future investors. (I think that's what the article was trying to say)

[rokhayakebe]

What percentage of tech companies succeed/ed because of "Big Name?"

[hodgesrm]

Umm, Theranos?