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I'm guessing from the way this story is told that it was posted by A or B and not C, but if it's exactly as described here it would not be normal to give C anyt
by pg 17y ago
I'm guessing from the way this story is told that it was posted by A or B and not C, but if it's exactly as described here it would not be normal to give C anything. The startup world is full of intros and I've never heard of anyone being compensated for one.
- jacquesm 17y ago> The startup world is full of intros and I've never heard of anyone being compensated for one. No, seriously? You've never heard of brokers that will go from one VC to another trying to find funding for a company they represent based on a success fee? I don't know or have any affiliation with this company but these guys are working just like that: http://www.intelligentfunding.com/ http://www.intelligentfunding.com/ There are numerous others.
- pg 17y agoI've never heard of a deal that actually happened because of one of them, no.
- starkfist 17y agoYou've never heard of brokers that will go from one VC to another trying to find funding for a company That is minor league C-lister stuff that only people who read blogs like ReadWriteWeb get involved with. It's the tech world equivalent of paying to be in a modeling agency.
- jacquesm 17y agoRaising funding is hard work, especially if you do not know the circuit and are busy keeping your start-up afloat. To have someone that will take the 'leg work' out of it in return for a small percentage on a no-cure-no-pay basis can be very good. People like that usually have a reputation to protect, they'll pre-screen the start-ups they represent and they'll do their best to bug their VC network only with those start-ups that they themselves deem worthy of funding. Y combinator is 'minor league', we're not talking 5 to 15K here, but roughly up to a million or so. Paying to be in a modeling agency is paying up-front, this is a construction where both parties win if a deal can be made. There are sleazy variations on this scheme where the broker demands exclusivity or other tactics to gain control of the start-up based on their inexperience but that's definitely not all of them.
- starkfist 17y agoI spent 15 years in Silicon Valley startup scene and respectfully disagree. Anyone advertising themselves as a VC matchmaker for a fee is looking for chumps. The good VCs have their own people on staff whose job is to go drinking with the cool startup kids. (they are usually classified as an EIR)
- byoung2 17y agoYou've never heard of brokers that will go from one VC to another trying to find funding for a company I would think in these cases, the broker should have a signed contract before the deal is made.
- jacquesm 17y agoThey had a verbal agreement to do this together, after the initial try at getting funding fell through they decided to bypass Charlie and go it alone. I personally think that even if there are no signed contracts they're doing the right thing by looking for a way to compensate 'Charlie' for his contribution, after all without him they might have gotten funding, but not this funding.
- byoung2 17y agoI read it differently. They had an agreement to get funding for NewCo with VC One. When that fell through, A and B got funding for OldCo with VC Two (and VC One as well). I don't think there was ever an agreement to get funding for OldCo, and C had previously left OldCo to become a contractor. Therefore, C does not have standing to receive compensation from OldCo.
- staunch 17y agoI seem to recall Charles Ferguson (Vermeer/Frontpage) let a guy invest $50k when he raised his Series A, as a reward for his introductions/reference. I think he also gave some equity to his headhunter, in part for the introductions he made. I suppose neither of those cases were "finder fees" though. Some consideration seems fair though.
- pg 17y agoIf investors do intros it's definitely expected that they'll be allowed to invest in any resulting round if they want. I was assuming C wasn't an investor though.