Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : Auric Goldfinger's Short List -- Ignore unavailable to you. Want to Upgrade?

To: Nevada who wrote (3051)	9/4/1999 2:57:00 PM
From: Phil(bullrider)	Respond to of 19428

Nevada, I did a search on the term. Here are the results. techstocks.com Hope this helps. Have fun, Phil

To: Nevada who wrote (3051)	9/4/1999 5:10:00 PM
From: Smilodon	Read Replies (3) \| Respond to of 19428

Washout is a common venture capital term. When a private company has failed in its original business, but is either trying again, or more likely trying a different angle, they will have a "washout" round of finacing. They essentially sell shares to new venture investors at a massively lower price than earlier rounds, such that previous investors have their stakes diluted to almost nothing. Of course, management will have to be given new shares as well to keep them in the company. Normally, venture investors have a clause in their funding terms that allows them to participate in any future rounds to protect their ownership. So, in a "washout" round, previous investors who wanted to continue investing would add money along with the new investors, and if they didn't want to continue and invest additional capital, their original equity in the company would be diluted away. Thus, they would be "washed out."