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800k actually is small enough to give away when you're dealing at that scale. The lawyers fees and other fees wouldn't even be worth that much from a sale. The
by cercatrova 6y ago
800k actually is small enough to give away when you're dealing at that scale. The lawyers fees and other fees wouldn't even be worth that much from a sale.
The bigger reason is reputation. If Techcrunch posted an article saying, founder screwed out of acquisition by billion dollar VC, it wouldn't work out so well for the next founder considering that VC.
- IshKebab 6y agoBut he would have still walked away with almost $3m, how would that be screwing him?
- cercatrova 6y agoWhy would they just want their original investment back? They'd demand 5 or 10x the original amount (as VCs) which completely wipes out the acquisition.
- IshKebab 6y agoBecause some money is better than no money? VCs don't really get to demand a certain amount. Investment doesn't work like that.
- cercatrova 6y agoThat is incorrect, VCs absolutely have preferential shares with liquidation preferences which can be multiples of their returns. Some money is not really better than no money if their reputation comes out as nickel and diming their founders, and future founders don't want to take their money, and if the VC misses out on a big exit as a result, now the VC has lost potentially much more than getting the 800k back.