

Backing Out of a Term Sheet - inmygarage
http://cdixon.org/2010/02/03/backing-out-of-a-term-sheet/

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pg
I think this will become much less common now that word spreads so much faster
among founders. We've only twice had VCs break a termsheet with a YC funded
startup, and both firms are now blackballed to varying degrees. There's also a
third VC I would probably never refer a startup to because of a termsheet he
broke with the previous startup of some guys we later funded.

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sachinag
If you made this list of three VCs public, it would place much greater
pressure on VCs to never, ever do this. Having a term sheet pulled is low
probability, but it can all but kill the chances of closing a round.

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fizx
Libel, etc, I imagine.

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sachinag
The truth is an absolute defense.

(Yes, I know it's impolitic - and Chris does the same "all the people I know
will be told" line - but as one of those crazy transparency > feelings people,
it'd be my preferred outcome. I only spent one year on the VC side in my short
career, but I'd have resigned if we ever even thought about pulling this
stunt.)

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anamax
> The truth is an absolute defense.

In the US. Not in the UK. I don't know about other countries.

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jbellis
How is it going to haunt the VC if he doesn't name them?

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boucher
Because when any YC startup (or anyone who has an audience with pg) asks him
about AcmeVC, he'll tell them to stay away.

Paul is pretty connected, and the community isn't _that_ big.

