- we have to think about this for a while
(that translates as 'no')
- we'll sign a letter of intent first
(that translates as 'you'll be on the hook, but we won't be')
- let our lawyers do the work, you concentrate on your company
(that translates as: You should let us write the contract, you just sign it)
For the best review of your chosen vc / group of vc's go and talk to people they've already invested in, especially the ones were there was a bad leave. Not to get a negative viewpoint, but to help you to avoid the same mistakes.
VC's are in it for the money, pure and simple. They are - with a very few exceptions - not your friend and should be seen as a very savvy business partner that could very well kill you to protect their investment, as they should.
Think of them as a powertool, used right it may get you fantastic returns, used wrongly you will end up hurting yourself.
Don't be afraid to make the rounds, even if you feel you have a good contact with one VC, look around some more and take your time. Not to play hard to get, but simply to learn the lay of the land. Pretend you're looking for a spouse, and take it that serious.
Oh, and do get your own lawyer, even if you can't afford it. Pay them from the investment you're going to get :)
They are - with a very few exceptions - not your friend and should be seen as a very savvy business partner that could very well kill you to protect their investment, as they should.
How often is it good business practice to have a pissed-off founder out there? You're opening yourself up to talent raids, exposure of company dirty laundry, negative press, and future problems for all your portfolio companies.
If the pissed off founder and the investor are at loggerheads then that is a very difficult situation, which comes up with some regularity, unfortunately.
How it is dealt with depends very much on the situation, I think that the recent 'moves' of Monty and some of the other people from MySQL are a good indication of what it can look like on the outside but I'm quite sure that the indoors conversations were quite different.
The reason why is exactly the one you quote above, to avoid exposure of company dirty laundry, negative press and future problems. But I'm quite sure that in spite of all that it has gotten a little bit harder for sun to do acquisitions and for Monty et. al. to get acquired again with a future startup (not that he needs to, he's got enough cash to call it quits anyway).
A few more:
- we have to think about this for a while (that translates as 'no')
- we'll sign a letter of intent first (that translates as 'you'll be on the hook, but we won't be')
- let our lawyers do the work, you concentrate on your company (that translates as: You should let us write the contract, you just sign it)
For the best review of your chosen vc / group of vc's go and talk to people they've already invested in, especially the ones were there was a bad leave. Not to get a negative viewpoint, but to help you to avoid the same mistakes.
VC's are in it for the money, pure and simple. They are - with a very few exceptions - not your friend and should be seen as a very savvy business partner that could very well kill you to protect their investment, as they should.
Think of them as a powertool, used right it may get you fantastic returns, used wrongly you will end up hurting yourself.
Don't be afraid to make the rounds, even if you feel you have a good contact with one VC, look around some more and take your time. Not to play hard to get, but simply to learn the lay of the land. Pretend you're looking for a spouse, and take it that serious.
Oh, and do get your own lawyer, even if you can't afford it. Pay them from the investment you're going to get :)