

Ask HN: What do you guys think about this term sheet? - strap

My company got a term sheet today, and it contains pretty much every 'bad' VC practice I've read about - double dipping, full ratchet anti-dilution, milestones, about half of the valuation we were asking for, micro-control by preferred shareholders over many operational decisions- and I realize this is probably just the start of a negotiation process but I'm also thinking, heck, we've been bootstrapping for so long now, we might be able to get over the hump ourselves.<p>I don't have a lot of advisers to talk to who've gone through something like this, so I was kind of hoping for some comments on my situation.<p>Thanks!
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sajid
You've got a term sheet, which means you've got something worth investing in
(social proof).

But, the investor is trying to screw you.

I've been in a similar situation before. Trust me, what you need to do is
speak to other investors before you make your decision.

If you don't know other investors then a good place to start is:

<http://venturehacks.com/intro>

Fill in the form at the bottom of the page and submit it.

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strap
Thanks for the idea

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fdschoeneman
Get an advisor, ASAP, who has been through something like this.

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TotlolRon
Yep. Your problem is not the term sheet. Your problem is you have no one to
get advice from about the term sheet.

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strap
Yes - we are talking to an experienced lawyer today.

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jamesshamenski
Welcome to the poker table!

Take this social proof and run around to other VC's. Having other people
interested is the only way you can improve terms and push anyone to close.

The best option is to say you dont need their money and would rather boot
strap operations (even if that is a bluff).

As a rule of thumb, always turn down your first offer. Always.

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minalecs
i think you sort of answered the question yourself. If you truly believe you
can get over the hump yourself, why give up equity for funding you may not
need.

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strap
I hear you - it would be really nice to go for it full time on this though

