Dear Sister: As the founder of Startup, a VC asked you to do (to get their financing) What's the most thing?
I don't think anything in the venture is really suspicious. Deals are usually made in the length of the arm, and the founders do not need to sell any shares if they do not want.
But .. But like most of the founders, I have done better and worse experiences with VCS. (And yes, when I invest, I don't make it).
https://www.youtube.com/watch?v=c7qn9RGZJ5O
Still, here are my worst / most of the experiences:
- Releasing a secret, second version of the trim sheet where I will be changed as CEO status. Oh, it was great. In my first startup, the second term sheet came from a new venture firm that was in panic. He released a beautiful criminal trim sheet, but it was fine on his face. What they didn't tell me what they gave a Second The version of other investors where I will be replaced as CEO. Without telling me and began recruiting a new CEO itself. We did not take this term sheet.
- Full Rescue Promise Note of 50 750,000. The third term sheet we found in our first startup was an interesting situation. Although at the moment I had a life -saving I probably had K 50K, I needed to sign a 50 750,000 Full resources Note (ie, paper loan) as part of financing. This meant that if the startup failed, I was personally on the hook at 50 750,000. While vcs Were not. It was a nutsu. With all justice, its term ended after a certain period, and the VCS had its own goals to force a certain kind of transaction. But it was a little crazy. Still, I signed it. I had to make a payroll.
- “You now have to divide the round with a VC, which is our friend and have to take much weakness than we have agreed after signing a term sheet.” It wasn't so fun. I had 3 trim sheets for Adobe Sign / Eco Sign, 3 firms, our badge round. I chose the first firm to give us a term sheet, but then the other requested me to take their money. I had a personal relationship there, so we went with Choice 2 (though we ideally prefer Firm 1). However, firm 2 was close business friends with firm 1 and then unless we respect the original trim sheet Plus Firm 1 took money. It was just a major headache and created endless drama. Before the term sheet is signed, you need to bring about these important conditions, not after. We did not agree. He created a lot of drama. Many paths. Finally, we signed a contract that we wanted with the firm 2. But after we have a signed term sheet, we have no way to try to force us to take money from both firms.
- Delete me from the M&A Offer meeting. It was just a simple dumb. Although I think the goal was to maximize any preferred results than any common results, I just completely confused me. And rejecting the M&A offer, where it may not be rejected.
Even these experiences, okay Causes. They were not 100 % irrational.
They were not just in the way of winning.
Now the stories of these days are less common, or at least at the height times become less common. At the height time, everyone was doing so well on the paper, very rarely worried. Although we will hear these hard stories at a slightly harsh time.
(Note: a latest Sister Classic Post)
https://www.youtube.com/watch?v=lbgcx34CLDQ
