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The cruel truth about how much money two founders will likely get after selling their startup for $465 million reveals the catch-22 of raising too much money

FanDuel was valued at $1 billion just three years ago. Now, it's being sold for less than half that amount. And according to the deal documents, FanDuel's founders will likely lose out.

  • Paddy Power Betfair is acquiring fantasy sports company FanDuel.
  • FanDuel was valued at $1 billion just three years ago. Now, the company is being sold for less than half that amount.
  • According to documents that detail the deal's specifics, FanDuel's original founders might not make any money from the sale.
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Selling a company is usually cause for celebration, but for the founders of fantasy sports company FanDuel, the moment is likely to be bittersweet.

The nine-year-old company, which was once one of Britain's most closely watched startups, was said to be valued at over $1 billion just three years ago. Now, it's valued at less than half that amount by the company that's buying it, Dublin-based bookmaker Paddy Power Betfair.

FanDuel's founders' loss is a classic case of the dangers of a sky-high valuation, in which the founders' original shares are so diluted that their original involvement reaps little compensation when it comes time to sell the company.

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The biggest winners of FanDuel's sell? The company's current executives, who are set up to make at least a few million dollars a piece.

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