Why I Turned Down $5 Million in VC Funding

What part of what I said gave you the impression of entitlement? I didn't say "I deserve to read this without ads". I said "I stopped reading because you put a massive pop-up that filled the entire screen and prevented me from reading it, I don't find that acceptable, and so closed the tab".

Would it be better to have no feedback about why people are bouncing?

Writing "Still completely unacceptable." makes you come across as though you were ripped off in some way..

No other reason is needed. If you don't need the money, and if you believe in the business, you don't need to justify turning down external investment. In fact, I'd argue that turning down money is harder than accepting it

Having said that, the rule of thumb is that you want at least 12 months of runway, and that's at the rate you want to go at. It takes typically around 6 months (if things go well) to raise VC money (unless they come to you - which is pretty rare).

From what I understood, Groove had 8 months at the current runway - before hiring the additional people they want to bring on board. That's typically when you start raising before you go into the danger zone with your runway. Also, considering the current perceived drought of Series-A funding, a $5M offer for a business generating $16k monthly is an outlier.

Of course, I hope Groove does well and never needs this money. Also, it's possible the deal terms were not favorable, though it's not mentioned specifically in the post. If that was not the case, in my opinion they had a chance to significantly derisk their business and they choose not to take it. Time would tell if their gamble pays off or not.

Question on convertible notes: doesnt a 1M seed round on a note suggest that a second round needs to happen? How do the investors feel about not having a second round to set the price and convert to equity?