3 ms·
There is no reason a rational company would prefer VC scrip (described here as "value-adding services") over a comparable amount of actual cash, since the forme
by commoner 7y ago
There is no reason a rational company would prefer VC scrip (described here as "value-adding services") over a comparable amount of actual cash, since the former is restricted and not certain to benefit the company. This arrangement also creates a conflict of interest, since the VC is planting decision makers into the company that primarily serve the VC's interests, and not necessarily the founder's or the company's interests.
Any founder who receives such an offer should consider whether it's worth giving up equity for the B2B equivalent of a gift card redeemable only for services that may benefit, but may also harm the founder's interests in the company.