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Good. We raised Series A from Chinese investors a few years ago and they were toxic. Not to mention the political implications of enriching countries like China
by rawrmaan 7y ago
Good. We raised Series A from Chinese investors a few years ago and they were toxic. Not to mention the political implications of enriching countries like China and Saudi Arabia. In hindsight would have rather closed up shop than taken their money.
- cheez 7y agoToxic how?
- omginternets 7y agoCould you elaborate? What made it toxic?
- internet_user 7y agoYes, please elaborate. +1
- bduerst 7y agoNot GP, but I've pitched to a crossover fund from China and they were super seedy. On top of having a questionable website and other investments, one of the red flags was they wanted their engineers to review our source code before/without signing any NDAs or commitments.
- kirubakaran 7y agoYou were surprised that China has red flags? (Thank you, I'll be here all week)
- sorenn111 7y agoI find jokes are rare on HN, but I'll always upvote one that makes me chuckle
- thih9 7y agoI think people here avoid puns and offtopic humor on purpose, so that it doesn’t distract from the discussion. I like this aspect of HN.
- mariushn 7y agoNot only that, but we also avoid inflammatory posts, affirmations without proofs/research to back them up, criticism without offering help & better suggestions...
- corysama 7y agoThat is a big part of what has helped HN last so long without following Reddit down the path of becoming a cacophony of puns, memes and references.
- sudoscript 7y agoWhere are you next week? This is a show I'll travel to follow.
- avocado4 7y agoWe also had Chinese VCs ask to review our code (their value proposition was access to Chinese hospital data). Also "system design interviews" asking to essentially how everything works in technical detail, and would work for future expansion plans.
- stcredzero 7y ago(their value proposition was access to Chinese hospital data) Whose value proposition to whom?
- deleted 7y ago[deleted]
- jacquesm 7y agoWe do tech DD, and also occasionally review code so that's pretty normal. We do take great care to ensure that no secret sauce ever makes it into our reporting, and if the situation requires it do a second round of reviewing before sending out the report to the party that commissioned it. I'm not saying we will never ever leaks bits but if you take your reputation serious in this field then you will do what is possible to ensure that the proprietary stuff stays just that in case there is no deal. Any VC that asks non-independent third parties to review your code should be shunned.
- nostrademons 7y agoThe concept of IP rights doesn't really exist in Chinese business culture. Your source code or any other proprietary technology is fair game. I know startup founders that have raised Chinese money and not regretted it, but it's important that it be "dumb money", i.e. they give you cash and go away while you write an occasional investor update and grow the business. Active Chinese investors (i.e. anything where you give up board seats, decision-making power, strategic partnerships, etc.) are bad news. You want to be in a position where if your investors ask you for something you can just ignore them.
- mfatica 7y ago> You want to be in a position where if your investors ask you for something you can just ignore them. What reasonable investor would put themselves in that position? They're just going to give their money away and not have any say in what happens?
- nostrademons 7y agoOnes who expect that the company in question is going to do well regardless of what they do and trust management to make good decisions on their behalf. This is the same position that every retail investor, every LP of a venture or hedge fund, every shareholder of a company where the founder controls a majority of voting stock, and every person with a pension or 401(k) puts themselves into. You could argue about whether that's a stupid thing to do, but it's the vast majority of shareholders within the world, so stupid or not, lots of people do take that bargain.
- omginternets 7y agoThis is quite standard in my (limited) experience. We're raising a seed round and I've spoken to nearly 100 VC firms. The most any have asked for is an observer seat.
- cududa 7y agoI mean yes that’s pretty much how 90% of deals in the valley happen?
- GordonS 7y agoBrit here. Reviewing source code before a purchase is pretty normal. I've personally done this for multiple companies that the enterprise I work for has purchased. In all cases it was a 1-day review, while supervised by someone from the company being purchased. It seems perfectly reasonable to get an idea of the state of what you are planning to purchase.
- SketchySeaBeast 7y agoWithout NDA?
- GordonS 7y agoNo, there was of course an NDA :)
- deleted 7y ago[deleted]
- tomcam 7y agoWell... they were seed investors, after all. Apologies, I’ll see myself out.
- rawrmaan 7y agoTheir personalities and expectations were toxic. They didn't understand what they invested in and were pissed when we couldn't grow a high-touch business like a pure software business. No pleasant or helpful interactions, just rage.
- gist 7y ago> In hindsight would have rather closed up shop than taken their money. Very idealistic and not the way I think at all. What are you going to do? Stop using any product associated with China? Where do you draw the line exactly? And who is to say that all chinese investors are the same anyway? Are you going to vet future investors (from any place) fully to make sure they are clean in every way and their intentions are pure? Or are you simply going to decide after the fact that you did enough when it actually makes no difference at all and you can say 'wow I wish I never did that'.