Idea: 38Saturday, 07 February 2015By. Francis Pedraza

FOMO

— Buy/Sell Participation Rights

FOMO lets startups print “free” cash by selling participation rights in a future round
— In the public markets, call options let investors hedge against FOMO.
— In the private markets, options and warrants don’t trade the same way, so can’t serve the same function.
— VCs are paranoid of FOMO, b/c returns are so skewed to “the one that got away”.
— So FOMO gives VCs a low-commitment way to buy participation rights for up to $X in future rounds.
— And startups a way to raise non-dilutive capital while cultivating hype/signal/intrigue.