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According to the article's author, companies are entitled to more or less unlimited free services from investors. Some people may disagree with that view. Per
by CurtMonash 13y ago
According to the article's author, companies are entitled to more or less unlimited free services from investors.
Some people may disagree with that view.
Personally, I don't invest cash in start-ups at all, except for founder's stock at truly nominal prices. (I once paid $100 for 1% of a company that soon was backed by AH, Google Ventures & other name-brand VCs.) If they want my services, they can pay cash or offer attractive equity.
In another case, I asked for and received 5% of the founder stock, and was very glad I did when the CEO went for a cheap and early acquihire, with me getting ~1% of the take after retention options and participating-preferred stock.
- ryanbrunner 13y agoI think that's stretching his point somewhat. Renegotiating the terms of your relationship in general isn't what he's arguing against, it's more about intentionally pulling the rug out from a company and demanding equity immediately before a funding round. That doesn't really imply good faith bargaining, and is really a lot closer to blackmail ("I'll make this deal tank and your company will go under unless I get 1% more")
- CurtMonash 13y agoThe article links to an earlier article of his. He does seem as extreme as I suggested, more or less. I also don't see what's wrong with the behavior he was criticizing. It seems that the offending angel said "If you want me to do more of what I have in the past, please pay me something." If the angel did something worse than that, he wasn't clear in explaining how or why.