Nivi · April 3rd, 2007
A big thanks goes out to our new readers, commenters, and all those who wrote about Venture Hacks. Here are some of our favorite comments so far:
Everyone in Silicon Valley benefits from lowering the transaction costs of funding startups, which means more companies get funded, more jobs get created and tax revenues increase without raising taxes.
Shouldn’t executing disciplined business plans around new technologies be the challenge of entrepreneurship? Contacting prospective investors and understanding what they want to hear should be the easy part.
“There are plenty of lawyers who know VC terms and VC deals very well, yet are not in the VC’s back pockets. Ask around your business community — you will quickly learn which lawyers you can trust as being more company/entrepeneur focused, and which ones will be good VC lawyers but too cozy with VC’s for a smart entrepeneur to really trust.
Also, many VC-back-pocket lawyers will sell themselves to you as having all the connections to the VC’s and can get your company in front of all the big players, but that should be an alarm bell. There is a difference — ask around with people who have been there and whose opinion you value and trust, and you will find it.”
There was a good exchange in the comments on Venture Beat:
A GD VC: “You need to trust your investor won’t jack you at every turn otherwise the enterprise is doomed from the beginning.”
startupboy [not Naval]: “You could very well say the same about VCs. You shouldn’t invest unless you trust the founders, so why bother with complicated terms? The core issue here is unequal negotiating power, not trust.”
From the humor pile, “Makeit” says:
“Naval is a God….VCs are bad and Naval is good! Naval talks…I listen.”
We think he is making fun of us.
Topics Comments
hi nivi –
my uncle pointed me to this site – apparently he knows your dad?
This is good stuff. Much needed.
I just want to throw in that my personal pet peeve with regard to the “standard” term sheet is the bit about the company paying the VC legal costs. C’mon – you have $500M and I am raising 1.5M and you want me to take the first $25k to pay your legal expenses for doing the deal? That’s like your dad giving you your allowance and then asking you to by him a hot dog.
When we were raising money for flixster i thought that must be a trick – like if i agreed to that term they would pull the term sheet at the last second and say i failed the secret fiscal responsibility test…
(Disclosure: I did in the end actually agree to that – but only because those guys at lightspeed are just so darn handsome.)
keep up the good work!
Best,
j
Funny story Joe. The simple hack on those fees is to cap them. Otherwise you are paying the other side to negotiate against you. The other side’s lawyers will continue arguing until they hit the fee limit.