Bain Capital, Sequoia Capital, and Silicon Valley Bank, the ones who are funding this, see great potential in the team that is bringing color to market.
They've given a long runway to Color, and if the airplane takes off those investors reap far more rewards then they would have if Color is wildly successful and other investors were able to participate in subsequent rounds of investment.
I cannot emphasize enough that this is a strong team (investors and owners). There are almost certainly specific targets and objectives this team needs to meet before they collectively decide to spend the entire 41 million.
Which means this thing could crash and burn after spending 3 million, and they unwind from there.
I believe Silicon Valley Bank does debt financing rather than equity financing. On top of that, I believe all 7 co-founders are worth over $1M each and several are worth multiple $M with multiple startup exits over the last 10 years.
They've given a long runway to Color, and if the airplane takes off those investors reap far more rewards then they would have if Color is wildly successful and other investors were able to participate in subsequent rounds of investment.
I cannot emphasize enough that this is a strong team (investors and owners). There are almost certainly specific targets and objectives this team needs to meet before they collectively decide to spend the entire 41 million.
Which means this thing could crash and burn after spending 3 million, and they unwind from there.