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I was being a little excessive. After all it should be clear that they won't get the shares without paying up. Or so I'd hope.
by H8crilA 4y ago
I was being a little excessive. After all it should be clear that they won't get the shares without paying up. Or so I'd hope.
- dheera 4y agoYes, of course, they don't get any shares. That's the issue with these term sheets, if you read the legalese, they don't say the VC must wire funds, it just says that in exchange for funds they get whatever stock or convertible debt or rights or whatever. If they don't wire, they don't get those things and the contract is then void. It doesn't say that they must wire funds, or at least, this isn't legally enforceable. The real problem is I'd really rather get a fast, hard rejection than handshaking and making space in a round for a VC only to have them drop out last minute and then having to scramble to get the void filled, and this whole situation leading to other VCs dropping out like dominoes because now "ooh something looks fishy".