

Venture Capitalists Coddle Entrepreneurs As Royalty - acabrahams
http://dealbook.nytimes.com/2014/08/05/venture-capitalists-coddle-entrepreneurs-as-royalty/?ref=technology

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7Figures2Commas
> The firm, Felicis Ventures, said on Tuesday that it would always support its
> entrepreneurs on company matters, giving up the right to vote against them.

> “The one thing that we always say internally is our success is predicated on
> our founders’ success,” he said. Signing a written promise to always vote
> with the founders, he added, “makes a really strong statement that we will
> not block any sale. We will not question the management.”

If this approach is focused on ensuring that founders have the ability to sell
their companies, I wonder if Felicis is also doing away with liquidation
preferences.

It's one thing to agree to vote with the founders; it's another to structure
your investment so that they can actually sell at any time without risk of not
making any money.

> The lawyer for Felicis, Gaurav Mathur, said he was initially surprised when
> Mr. Senkut came to him with the idea. But he said it was consistent with the
> firm’s philosophy and added that it was permitted under the firm’s
> agreements with its limited partner investors.

I wonder if the firm's limited partners were aware of this when they became
limited partners.

