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I’ve never been involved in fundraising, so I have to ask: how often to investors balk at the last minute? Seems like a dick move.
by treyfitty 7y ago
I’ve never been involved in fundraising, so I have to ask: how often to investors balk at the last minute? Seems like a dick move.
- danpalmer 7y agoWhat it probably means in this case is that they had a term sheet, but that during due-diligence (1-3 months between term sheet and signed contracts) they pulled out. It's possible they found things they didn't like in DD. It's not uncommon to find oddities, but normally not a big issue at all. It's a really bad move. It looks very bad to companies who might be seeking investment, and could get a VC a name for causing issues in deals, so they only do it when they really need to. It typically means the company closes down as most companies raise when they have ~months of runway left, and raising a new round would take too long in most cases.