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>We couldn't believe that this was the best deal obtainable for venture funding of the company, and we were inclined to ask around to see if this was reasonable
by hitekker 9y ago
>We couldn't believe that this was the best deal obtainable for venture funding of the company, and we were inclined to ask around to see if this was reasonable. But, our Distinguished Financial Advisor informed us that this would constitute ``shopping the deal'' when ``a deal was on the table'' which was right out by the genteel standards of the venture community, and that he could not countenance such unrefined behaviour (notwithstanding the fact that in the real world this kind of collusion is called ``conspiracy in restraint of trade'' and people go to jail for it).
Fun read!
- draw_down 9y agoA bunch of capitalists who have norms against competition. Cool.
- dkfmn 9y agoRead with a critical eye as I, obviously, wasn't present: in this case it seems likely the Financial Advisor screwed up or simply misunderstood the industry. "Shopping the deal" is only anathema if you've signed a term sheet. Many companies receive/solicit multiple term sheets and accept their favorite.
- daemin 9y agoOr perhaps the Financial Advisor was also a friend or advisor to the venture capitalist, hence if they got them a really good deal they would have solid well paid work for the next few years.
- dkfmn 9y agoWhile possible this doesn't feel likely to me (not that my feelings have any bearing on what actually happened). It would be a breach of fiduciary duty, or at least compromised advice if the advisor wasn't a fiduciary.