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The big concern with what I read is that you need to set your own proposed term-sheet slightly below market. I'm not sure why a startup would want to do that.
by dotBen 16y ago
The big concern with what I read is that you need to set your own proposed term-sheet slightly below market.
I'm not sure why a startup would want to do that.
There was also no real explanation as to why you wouldn't want a lead investor, or what is wrong with having one.
It feels like this is doing something different for the sake of it, and fund-raising seems to be a prime time when you don't want to do anything unusual or different to the norm as it could spook investors and close doors.
- aditya 16y agoOne reason to not want a lead investor is because you can't find one. Sometimes you'll get a lot of verbal confirmations, but no one deal champion... so why wait for a lead, just take the money and move on.
- gojomo 16y agoThe message from both PG and the VH guys seems to be this style is on the rise, especially among the best startups -- so there shouldn't be a "this is different and spooky" effect. In the article Nivi rephrases "below market" as "priced to move" -- to create excitement and eliminate the need for lengthy due diligence. Leaving a little on the table could make sense for a faster, more-likely-to-finish-without-a-hitch round.
- dotBen 16y agoThe message from both PG and the VH guys seems to be this style is on the rise Is it though? I'm a fan of PG and VH.com but I wonder if the tail is actually wagging the dog here.