

Ask HN: Evaluating a pre-seed funding offer - adsf

We are a newly formed team who was recently been offered a small amount of pre-seed funding.<p>We're evaluating the offer, and we wanted to get HNs input on what some important things to look at would be.<p>Some of the things we're doing are:<p>Evaluating the term sheet by<p>- looking at what other pre-seed funds are offering<p>- asking a local entrepreneur support organization to go over the terms with us<p>- having an attorney friend (experienced with startups) look it over for any hidden "gotchas"<p>Gauging the potential benefits of the relationship by<p>- reaching out to the local community and asking for feedback on the investor<p>- asking the investor what kind of involvement we can expect from them going forward<p>- asking the investor for contact info of other companies in their portfolio.<p>What other things would you do? Any general or specific pieces of advice? Have you been through this before - do you care to share your experience?
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jayzee
\- Is the investor a high net-worth individual?

\- I would not get a friend attorney even if he has experience with start-ups.
Talk the the established law firms and they may be able to defer fees. That
way you can be sure that you got the 'gotcha's'

\- Follow up with portfolio companies that the investor recommends but also
others whom he invested in but did not recommend. you might learn more in the
later case

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adsf
Thanks for the response, some really good points.

To answer your questions, the investor leads a group of high net-worth
individuals.

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Jsarokin
I don't know the answer to your question, but it may be worthwhile to post it
on Quora as well.

Good luck finding your answer, and congrats on the funding offer.

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adsf
Thanks, will do.

