

When a meeting with a VC goes bad (Jobloft) - Ultrapreneur
http://www.youtube.com/watch?v=vdbThklcD_8

======
palish
Poking around, I found [http://www.jobloft.com/blog/2006/11/22/jobloftcom-the-
suns-s...](http://www.jobloft.com/blog/2006/11/22/jobloftcom-the-suns-still-
shining-outside-the-den/) .. It's Jobloft's side of the story. Apparently the
dragons wanted to invest $200,000 for 50% of the company. I have no idea if
that's a good deal or not.

~~~
pg
Structurally that is almost guaranteed to be a bad deal. I doubt you'd ever
find a deal of this form in the history of a startup that went on to be
successful. If an investor buys as much as half the company (it does happen in
some series A rounds), the valuation should be higher.

Investors might pay $200k for half a restaurant or some other business like
that, but not a startup.

~~~
electric
Yes I think the professor realised this -- he was one of the founders of
lavalife IIRC.

I have seen the show and my observation was: The dragons are really mostly
into funding sauce-makers, innovative clothing accessories, etc. and they
apply the same principles to startups -- doesn't work well.

------
natrius
From their homepage:

"Using Web 2.0 technologies such as Google Maps, AJAX, RSS and tagging, you'll
find the perfect job based on where YOU live."

This hurts me.

------
jawngee
200k for 50%? That's crazy.

The professor was right on so many levels. That 200K wouldn't last three to
four months. Rent, salaries, hardware, etc.

That said, the professor was slightly insulting, but I don't think his
position was wrong at all.

~~~
webwright
Is it crazy? YC offers $20k for 2-10%...

It utterly depends on what stage the company is in. If it's a few guys and a
prototype, $200k of seed money for 50% isn't necessarily a lousy deal.

And, for the record, it could last quite a while. 3-5 young guys making rice-
and-beans money, cheap rent, 2-3 servers at ServerBeach...

The "professor" was insulting and controlling-- he raised the VCs' hackles,
which isn't going to move the meeting in the right direction. If he had a
problem with the valuation, he should have raised the concern before they'd
issued the check. That's bad faith negotiating.

------
bp
The biggest problem is that this professor apparently didn't discuss how he
thought the 200k was a bad deal beforehand with the founders. Or, if he had
discussed it beforehand, the founders had decided it was still a deal they
would like to proceed with.

Instead, he went ahead and torpedoed the deal without the founders consent. It
certainly makes for good television, but I'd be pissed if I were one of the
founders.

~~~
karzeem
Yeah, the source of the problem was that the founders and the professor were
out of sync. If they agreed with him, they shouldn't have been in that meeting
in the first place. If they disagreed with him, they should have stood up in
the middle of his rant and told him to stop talking and leave the room.

As it happened, I guess it was uncomfortable for them to discuss, so this
scene, which is just about the worst-case scenario, came to pass.

------
axod
'professor' comes across as a total dick to me. If he thought the valuation
was too low, why didn't he say that instead of insulting people and pissing
them off.

------
Ultrapreneur
I was also a pitcher/presenter on this show, and the "Dragons" were some of
the nicest VC's I've met.

------
brennannovak
Fascinating little encounter. It continues to seem to me that ego, and all the
slings and arrows that're attached, is the number one crusher of creativity.

------
s_baar
HAHAHA. Vintage grad student.

------
naivehs
well that was entertaining

------
redrory
lol

