I'm wondering what happens to the cap table now. Lets say after many raises the investors own 50% of the company and 50% is founders and employees. If the company borrows money to buy out the investors, does that mean the 50% owned by founders/employees turn into 100%? I'm thinking the valuation would still remain the same, which means suddenly their value goes up significantly.
the valuation would have to drop to account for the debt the company took on.