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The issue is that their fund business model looks at a 20% roi over 5 years as a loss. If they do that 50% of the time, they don't raise another fund. There is

The issue is that their fund business model looks at a 20% roi over 5 years as a loss. If they do that 50% of the time, they don't raise another fund. There is nothing wrong with getting what you are entitled to. But, it's worth praising when someone forgoes what they are entitled to, when the situation really isn't a win - win. The VC took an immaterial loss, by choosing for give up an immaterial gain, so that something material can happen for the founder and their team.

treis 6y ago
>The VC took an immaterial loss, by choosing for give up an immaterial gain, so that something material can happen for the founder and their team. But that's not what happened. The business was sold for $4 million. The only difference the VCs actions made was that the founder walked away with 3.7 million instead of 2.9.
- relaunched 6y ago
  There were two things worth pointing out - the acquisition price was lower b/c the founder wanted to walk away and >>>As part of the structure of the deal, Xenon guaranteed I’d take home $3.7m, regardless of what came up during due diligence. This was important because many times, after months of due diligence, things invariably come up that reduce the purchase price: working capital requirements, unpaid PTO, unrecognized revenue, and a thousand other things. And I wasn’t interested in dealing with that. I wanted stability and I wanted that $3.7m outcome to hit our family’s financial goals. Given those terms, I believe the author when he says that this was the best offer he could get that met his terms. If that is true, had the investors insisted on their cut, he founder wouldn't have hit his family financial goal, and would not have sold.
- dsfdsfkl 6y ago
  Why are you so bitter dude, the guy worked his ass off and got his exit. Celebrate it and look to see how you can replicate it instead of coming off as jealous. What a VC does with their money is their choice, a 800k return isn't worth their time and energy if they can spend that time and energy on a billion dollar company within their portfolio.

treis 6y ago

>The VC took an immaterial loss, by choosing for give up an immaterial gain, so that something material can happen for the founder and their team. But that's not what happened. The business was sold for $4 million. The only difference the VCs actions made was that the founder walked away with 3.7 million instead of 2.9.

relaunched 6y ago
There were two things worth pointing out - the acquisition price was lower b/c the founder wanted to walk away and >>>As part of the structure of the deal, Xenon guaranteed I’d take home $3.7m, regardless of what came up during due diligence. This was important because many times, after months of due diligence, things invariably come up that reduce the purchase price: working capital requirements, unpaid PTO, unrecognized revenue, and a thousand other things. And I wasn’t interested in dealing with that. I wanted stability and I wanted that $3.7m outcome to hit our family’s financial goals. Given those terms, I believe the author when he says that this was the best offer he could get that met his terms. If that is true, had the investors insisted on their cut, he founder wouldn't have hit his family financial goal, and would not have sold.
dsfdsfkl 6y ago
Why are you so bitter dude, the guy worked his ass off and got his exit. Celebrate it and look to see how you can replicate it instead of coming off as jealous. What a VC does with their money is their choice, a 800k return isn't worth their time and energy if they can spend that time and energy on a billion dollar company within their portfolio.