4 ms·
Honest question: if you sell <50% of your company to VCs or anyone else and your articles of incorporation state that you can do whatever you want if you own >5
by djoldman 3y ago
Honest question: if you sell <50% of your company to VCs or anyone else and your articles of incorporation state that you can do whatever you want if you own >50%, then why do what the VCs tell you to do?
Beyond gaining some sort of reputation for not doing what your investors want, is there anything else?
- lijok 3y agoTerm sheets, tranched funds
- ohgodplsno 3y ago> your articles of incorporation state that you can do whatever you want if you own >50% Then VCs won't invest in you, put a bunch of cash into a competitor, bleed you dry and either let you die or force you to reincorporate in a way they can have ownership. VCs are a cancer. They want to spread and grow, at any cost.
- benjaminwootton 3y agoIt’s not worth taking VC if you aren’t going to put it to work. And if you put it to work to any degree, you start growing and accruing costs. You are then in a race against time for the next raise and you are off to the races.
- deleted 3y ago[deleted]
- streblo 3y agoYou have a fiduciary duty to the shareholders. But that doesn't equate to 'do everything you possibly can to achieve exponential growth'.
- Guvante 3y agoIf you assume you can outsmart a VC who has worked with hundreds of startups with an idea you just had you are exactly the schmuck they want to work with. The actual deals are very complex and the details are hard to understand but it isn't as simple as "here is $10m go make me rich".
- t0mas88 3y agoAs part of that < 50% investment the articles of incorporation are going to change to give them at least some control. Unless you're an outlier like Wework and we all know how that ended: https://finance.yahoo.com/news/wework-downward-spiral-could-lead-105800926.html https://finance.yahoo.com/news/wework-downward-spiral-could-...
- SpicyLemonZest 3y agoWhy don’t you pick up the soccer ball and run around with it in your hands? There’s no fundamental reason you can’t have minority investors whose opinions you completely ignore, but that’s not the game that VCs or the people who accept VC money are playing.