
How Not to Get Screwed by VCs - sant0sk1
http://www.readwriteweb.com/readwritestart/2009/06/how-not-to-get-screwed-by-vcs.php
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quellhorst
Easiest way to avoid getting fucked by VCs, don't use them. Bootstrap and work
your ass off.

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jasonlbaptiste
Depends on the business. Most companies don't need or qualify for venture
money and believe they need it because of what they read on teh blogz.
Building a high growth 10x return potential 9 figure company doesn't come
easy.

Pretty sure Loopt bootstrapped to start and worked their ass off. I'm also
pretty sure, they couldn't do what they need to do without $13.3m or so in
funding. Having sequoia and NEA also helps a lot beyond the dollars. The value
add from those VCs is significant, not bullshit by any means.

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menloparkbum
_Having sequoia and NEA also helps a lot beyond the dollars._

How do they help beyond the dollars? I did two startups backed by Sequoia and
they didn't provide any help besides the money.

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catch23
They will almost always help if they've invested in you by giving you access
to their rolodex or providing direct advice. Even angels who don't get a board
seat will want to help you if they've invested in you. If they aren't helping
you, that typically means they think you're doing a bad job or that they know
you're doomed already. And usually it does take some work on the founder's
part to actually ask for the help.

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quizbiz
Hold on to as much equity as you possibly can.

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marcus
First time entrepreneurs usually confuse equity with control, there can be
dozens of mechanisms, by which VC's can gain control of a company they
invested in.

A few examples:

* Controlling all C-level positions, firing you at will (which will affect your vesting schedule) * Controlling spending which will force you to raise further rounds, further dilluting you * Board seats * Veto power for exits

Get a lawyer and read everything a dozen times...

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spitfire
Don't use them.

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wheels
This isn't Reddit; please don't write comments like that. If you're going to
write a one liner please try to at least find something cleverly amusing
rather than obvious and tired.

Some ventures will do better with venture backing, in fact, that's covered in
the article, and there are some reasonable gotchas in the article. Your
comment, on the other hand, adds nothing.

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known
aka be diplomatic

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ksvs
Or better still, actually say something useful.

