[solenoid0937]

How do investors cash out? Do they sell to new round investors?

[barbarr]

Going off the other reply, I wonder if a highly-active secondary market means that companies can raise series [A-Z]+ rounds effectively forever, where each "round" just refers to a giant purchase of shares under strict company supervision. Is this the new game for startups?

[DenisM]

If investor pool becomes too loose the company becomes de facto public, subject to all SEC-enforced regulations.

The judgment is subjective though, so pushing the boundaries could be a calculated risk.

[bix6]

Correct. There is also a secondary market.