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More Money, More Problems: The Down Side of a Mega Valuation

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This story appears in the February 2014 issue of Entrepreneur. Subscribe »

Entrepreneurs fight for that big first valuation just like job seekers fight for the biggest salary--figuring the more they get now, the bigger the payday will be down the road. It's inherent to the hustle. This fight over ownership and control pits entrepreneur against investor the minute talk of a company's valuation begins. The investor wants a bigger percentage of the company via a lower valuation; the entrepreneur wants the opposite. But why the hostility? The reality is that both parties could learn a bit from the smaller-piece-of-a-bigger-pie analogy. Here's why.

Shutterstock/Val Lawless

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