3 ms·
The idea here is good, but the execution leaves far too much room for the startup founder or the investor to get screwed. In contract law any ambiguities are ju
by 3pt14159 14y ago
The idea here is good, but the execution leaves far too much room for the startup founder or the investor to get screwed. In contract law any ambiguities are judged against the person that wrote the contract. Since the startup founder wrote "This is to confirm you're in for $100k at a $5 million cap." This is the contract that they have offered. Why bother making things so formal and binding when everyone knows that things still need to be dotted and signed.
My main concern is that this is forcing contracts onto normal negotiation. Maybe if the wording was changed to "strongly interested in" so that you can still publicly shame repeat offenders, without having the contract being formed when there are still other things to consider.
- danenania 14y agoIt seems like the point here is that 'normal negotiation' is flawed. If you're really planning to invest (or accept investment), you're going to be filling out a large and thorough contract fairly soon anyway. What's the harm in starting out with a mini-contract, unless you want an option to weasel out? If there are other things to consider that prevent you from doing this, then you shouldn't be verbally making those same commitments. There's still room to say "strongly interested" or whatever instead, but you shouldn't expect your place in line to be saved if others say "definitely" and follow the protocol.
- OnyeaboAduba 14y agoIm confused what other things are there to consider if you say your in for a certain amount you should have no problem having that put in writing right?