51–60 of 237 posts
This seems completely sound. Is it implicitly understood that all investors get the same terms? I assume that if there is an agreement to invest $100k at $5M cap, then the startup can't go take another $100k at a $4M cap, without giving that same deal to the first investor.
Can someone define cap for me in this context?
This is great protocol for all discussions/agreements. It's pretty hard for any relationship to break down if there's a shared understanding of expectations. The re-statement/confirmation email is a great weapon against what time+memory do with reality, whether it's in the investment setting, with a partner, with an employee, or, heck, with a friend/spouse.
Electronic records are the only way to avoid he said/she said. (Word is this is how Ellen Pao's case against Kleiner is going to unravel).
I could really use some advice on this, actually. It's very serendipitous to see this posted. What if you have a handshake deal and the other person abruptly disappears? I'm incurring all costs of operation, they've gone back and not completed anything they've said they would and now don't even reply to emails?
Honestly? Given what you've described, they aren't interested and it isn't happening.
What if my site starts to take off? What if it doesn't, but is a lifestyle business? Then he decides he wants back in!
I don't want him to come in later and demand anything from me, since he's abandoned me and prior to that at least 90% of his initial promises went unfulfilled.
Why not do something creative like have the investor sign a dollar bill (of any denomination) and give it to the founders? Every founder comes prepared with some cash in their wallet, and then when you confirm a deal the founders ask the investors to sign the dollar bill with a Sharpie/pen. On it would be some sort of short-hand for the deal valuation... Cash is more ubiquitous than phones - even impromptu, it's high…
>Cash is more ubiquitous than phones Are you sure? Right now I have a phone but I don't have any cash.
Why not do something creative like have the investor sign a dollar bill (of any denomination) and give it to the founders? Every founder comes prepared with some cash in their wallet, and then when you confirm a deal the founders ask the investors to sign the dollar bill with a Sharpie/pen. On it would be some sort of short-hand for the deal valuation... Cash is more ubiquitous than phones - even impromptu, it's high…
Totally unrelated to the topic at hand, but what is PG's obsession with tiny fonts? this article is set in 8.5pt font - can anybody read that? at 10pt HN itself is almost as bad.
A handshake is generally not taken to be a legally binding contract in itself. An email might be. So it might be worth making it clear in the emails that you don't intend them to be legally binding.
This seems completely sound. Is it implicitly understood that all investors get the same terms? I assume that if there is an agreement to invest $100k at $5M cap, then the startup can't go take another $100k at a $4M cap, without giving that same deal to the first investor.
Can someone define cap for me in this context?
http://www.askthevc.com/wp/archives/2011/09/convertible-debt...
Why not do something creative like have the investor sign a dollar bill (of any denomination) and give it to the founders? Every founder comes prepared with some cash in their wallet, and then when you confirm a deal the founders ask the investors to sign the dollar bill with a Sharpie/pen. On it would be some sort of short-hand for the deal valuation... Cash is more ubiquitous than phones - even impromptu, it's high…
o Everyone has a mobile device at all times, trying to remember to carry cash and/pens is an extra step. Cash, in the valley, is not as ubiquitous as a phone. In fact, it's not as ubiquitous as a smart phone.
o Texting is instantaneous. In fact, when we're sitting at a table having a conversation, it's not unusual for some people to be texting each other instead of talking to avoid creating a break in the conversation / side conversation.
o Central, Secure, two-party tracking with SMS/WhatsApp/iMessage. Nice Audit trail as well, and you have it all handy on your phone to keep track of things. Nobody wants to deal with more little pieces of paper.
Why not do something creative like have the investor sign a dollar bill (of any denomination) and give it to the founders? Every founder comes prepared with some cash in their wallet, and then when you confirm a deal the founders ask the investors to sign the dollar bill with a Sharpie/pen. On it would be some sort of short-hand for the deal valuation... Cash is more ubiquitous than phones - even impromptu, it's high…