31–40 of 45 posts
If people want to pay half later, find a way to cut what they want to buy in half and give it to them at this time and make no promises yourself either.
That said, I wouldn't really qualify any of the items mentioned in this post as "tricks" or "sleazy". Any halfway decent CFO or attorney can run the numbers and explain the outcomes. Instead, the bigger point is that any deal has to be viewed through the lens of the needs of both sides. For a businessperson who desperately needs $7 million today to pay for a new factory to fill an order, it may be worth giving up something down the road vs. foregoing the investment and losing out on the opportunity.
Brad Feld's blog should be the first thing you read if you get a term sheet (or even better - if you start trying to raise $). He helps explain these things in plain english and what they look like in lawyer terms as well.
Not that Brad is wrong about anything.
It's just that this isn't a software package where you can google around and read a few blog posts and get up to speed.
A good lawyer will be familiar with what is going on, current terms, etc.
Wow. Thank you for the insight, as someone who is working on getting funding for my business.
Brad Feld's blog should be the first thing you read if you get a term sheet (or even better - if you start trying to raise $). He helps explain these things in plain english and what they look like in lawyer terms as well.
Jesus, no. You go talk to your experienced lawyer about the term sheet. Not that Brad is wrong about anything. It's just that this isn't a software package where you can google around and read a few blog posts and get up to speed. A good lawyer will be familiar with what is going on, current terms, etc.
Wow. Thank you for the insight, as someone who is working on getting funding for my business.
This advice is about PE deals, not you.
One of the cardinal rules of software development I've decided over the years is to seek to reduce complexity and reduce risk. With respect to entrepreneurship I go in with a similar philosophy. Therefore as a general rule I think it's wise to avoid outside investment. Because it exposes you to unnecessary additional complexity, risk and sleaze. If you can start and grow a business without it, strongly prefer to do s…
Earlier quoted context omitted.
This advice is about PE deals, not you.
I think you're mistaken. The title of the article is "The Tricks Investors Use Against Founders". I'm a founder, working on attracting Private equity from investors, and trying to make sure I don't get tricked. I think that this advice is for me!
This refers to large scale deals from PE shops.
I've personally raised twice and have invested in 50+ startups. None of this stuff happens in early stage VC or angel land.
Interestingly, in his interview on Mixergy [1], Oren Klaff (author of Pitch Anything) describes money as the ultimate commodity. You can get money anywhere, there's only one of ME.
He discusses this as "prizing". It's definitely worth a look (the book is also pretty interesting).