There's a crisis in venture capital.
Fred Destin
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Just had a VC pull a term-sheet late in the day on one of our startups. After they turned off all other conversations. Days from wiring. As a founder, what can you do?
I've learned the hard way to ask these questions prior to signing:
- Are we done here? Are you in?
- Is there anything left to do from a commercial due diligence standpoint?Â
- Are there any open areas where you or your group are not yet convinced?
If you sign a term sheet, you want to make sure that the investor is 'in" barring some really unexpected findings in legal and financial due diligence.
That conversation may seem scary but it is essential. Founders often rush to lock terms (and VCs push hard). Don't. Look them in the eye and ask those questions. And once you have gotten a solid answer, do all the corny things like shake hands or give each other a hug. You want that term-sheet to be as close to a full commit as you possibly can.
Happy hunting.
I've learned the hard way to ask these questions prior to signing:
- Are we done here? Are you in?
- Is there anything left to do from a commercial due diligence standpoint?Â
- Are there any open areas where you or your group are not yet convinced?
If you sign a term sheet, you want to make sure that the investor is 'in" barring some really unexpected findings in legal and financial due diligence.
That conversation may seem scary but it is essential. Founders often rush to lock terms (and VCs push hard). Don't. Look them in the eye and ask those questions. And once you have gotten a solid answer, do all the corny things like shake hands or give each other a hug. You want that term-sheet to be as close to a full commit as you possibly can.
Happy hunting.