3 ms·

Yea, we've been wondering that ourselves. :) We've already gone through the DD process with him and his lawyer, and a new shareholder's agreement has been dra

by seaking 16y ago

Yea, we've been wondering that ourselves. :) We've already gone through the DD process with him and his lawyer, and a new shareholder's agreement has been drafted. It has verbiage in it that basically allows him to come on as a voting shareholder, with the ability to ascend to a director once he feels "he is ready". His readiness is mostly contingent on industry knowledge. We're in a space that is largely unknown to him, and he wants to take the time to bring himself up to speed before taking a more active role in the company. One of the reasons we're feeling trepidatious is that we haven't spoken to the man since August, save two email. The rest of our interactions have been with his lawyer, who, while civil, has been a bit onerous to work with. We're just not sure if this is an indication of how our relationship will work going forward, or if this is merely a difficult courtship period that could result in a truly beneficial working relationship down the road.

lancewiggs 16y ago
It sounds like you already know the answer. My 2 cents is to back yourselves for another month or two, keeping it lean. Use the time to improve the viability of the business, but also to shop for other offers. A bit of competition will increase that valuation and let you assess the quality of advice and commitment you'll get. Alternatively sell him 15% of the company at the valuation he is offering now, and use that money to keep going until the next round at a higher valuation based on more mature business results.
andrewem 16y ago
In business relationships as in personal relationships, the courtship period is where people take the greatest pains to be on their best behavior. Thus far, the potential investor has shown himself to be uninterested in direct interactions that would let you get more comfortable with each other, and nothing in his behavior provides reason to expect he'll suddenly become helpful and acquire a deep understanding of your business once he's your partner.

by seaking 16y ago

lancewiggs 16y ago

It sounds like you already know the answer. My 2 cents is to back yourselves for another month or two, keeping it lean. Use the time to improve the viability of the business, but also to shop for other offers. A bit of competition will increase that valuation and let you assess the quality of advice and commitment you'll get. Alternatively sell him 15% of the company at the valuation he is offering now, and use that money to keep going until the next round at a higher valuation based on more mature business results.

andrewem 16y ago

In business relationships as in personal relationships, the courtship period is where people take the greatest pains to be on their best behavior. Thus far, the potential investor has shown himself to be uninterested in direct interactions that would let you get more comfortable with each other, and nothing in his behavior provides reason to expect he'll suddenly become helpful and acquire a deep understanding of your business once he's your partner.