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How is this any different from a VC changing the terms on you at the last minute (which I am told happens routinely)? It is just another form of re-trading a d

How is this any different from a VC changing the terms on you at the last minute (which I am told happens routinely)? It is just another form of re-trading a deal.

crashdev 13y ago
I work with a ton of investors -- both angel + VC -- and this kind of opportunistic self-dealing is not condoned or tolerated by any of the professional / career investors I work with. It takes a long time -- and the help of many people -- to build a real business and folks who want to stay in the early-stage game don't pull shit like this because it undermines trust among both founders and fellow investors when you need it the most.
- joshuaellinger 13y ago
  I certainly agree that it undermines trust but don't VCs routinely change terms at the last minute in a series A or B? Is that really uncommon when you get to the professionals? I've never had to deal with this myself but I am told that it happens all the time. You think you have a deal and then you get a last minute call that says we can't do that evaluation or we want some extra warrants. The rule I have always heard is "you don't have a deal until the check clears".
  - crapshoot101 13y ago
    No, they don't. The fact that someone here got screwed once does not in fact suggest this practice is the modus operandi. VC's are not out to screw you, and if nothing else, the reputational harm of the actions you described would be immense. Respectively, this sounds like a naive, 2nd hand perspective.
- rabbitonrails 13y ago
  Working with a ton of investors -- both angel and VC -- does not the private phone call make.
ChuckMcM 13y ago
I've only ever experienced that with 'new' people to venture capital. Basically bringing a short term view to a long term game. Fortunately the ones I've met who have done that have not stayed in the game long (I don't know if the partners ask them to leave or they just stop getting deals, but I've not met anyone who has 'lasted' with that sort of approach).
jacquesm 13y ago
Changing terms at the last minute would be an excellent way to lose a deal and no VC that is in it for the long haul will pull a stunt like that unprompted. When it does happen, more often than not (at least, in most cases I'm familiar with) it was to compensate for things disclosed just prior to doing a deal. If such a disclosure does not scuttle the deal entirely the least you should count on is an adjustment. That's why you make sure there is a high level of transparency by the time a terms sheet is signed, you're in for a rough ride if you have not been up-front about any lingering issues.

How is this any different from a VC changing the terms on you at the last minute (which I am told happens routinely)? It is just another form of re-trading a deal.

crashdev 13y ago

I work with a ton of investors -- both angel + VC -- and this kind of opportunistic self-dealing is not condoned or tolerated by any of the professional / career investors I work with. It takes a long time -- and the help of many people -- to build a real business and folks who want to stay in the early-stage game don't pull shit like this because it undermines trust among both founders and fellow investors when you need it the most.

joshuaellinger 13y ago
I certainly agree that it undermines trust but don't VCs routinely change terms at the last minute in a series A or B? Is that really uncommon when you get to the professionals? I've never had to deal with this myself but I am told that it happens all the time. You think you have a deal and then you get a last minute call that says we can't do that evaluation or we want some extra warrants. The rule I have always heard is "you don't have a deal until the check clears".
- crapshoot101 13y ago
  No, they don't. The fact that someone here got screwed once does not in fact suggest this practice is the modus operandi. VC's are not out to screw you, and if nothing else, the reputational harm of the actions you described would be immense. Respectively, this sounds like a naive, 2nd hand perspective.
rabbitonrails 13y ago
Working with a ton of investors -- both angel and VC -- does not the private phone call make.

ChuckMcM 13y ago

I've only ever experienced that with 'new' people to venture capital. Basically bringing a short term view to a long term game. Fortunately the ones I've met who have done that have not stayed in the game long (I don't know if the partners ask them to leave or they just stop getting deals, but I've not met anyone who has 'lasted' with that sort of approach).

jacquesm 13y ago

Changing terms at the last minute would be an excellent way to lose a deal and no VC that is in it for the long haul will pull a stunt like that unprompted. When it does happen, more often than not (at least, in most cases I'm familiar with) it was to compensate for things disclosed just prior to doing a deal. If such a disclosure does not scuttle the deal entirely the least you should count on is an adjustment. That's why you make sure there is a high level of transparency by the time a terms sheet is signed, you're in for a rough ride if you have not been up-front about any lingering issues.