Re:Ask YC: Advice after receiving seed funding offer?
by blader on Wednesday May 21, 2008 @10:32PM
(#196814)
It's an absolutely awful and egregious to the point of malicious deal.
For a tiny investment, you are getting an overblown option pool, a 25% ROFR on your next round, and getting an investor leaning board.
When negotiating financing, you have to negotiate. In fact, not negotiating is a sure way of signaling that you don't know what you are doing. What you really want to do is to let the market price it out - you want a minimum of 2-3 term sheets to get a fair market value for it.
An actual, decent VC would just give you $25K as a grant.
For a tiny investment, you are getting an overblown option pool, a 25% ROFR on your next round, and getting an investor leaning board.
When negotiating financing, you have to negotiate. In fact, not negotiating is a sure way of signaling that you don't know what you are doing. What you really want to do is to let the market price it out - you want a minimum of 2-3 term sheets to get a fair market value for it.
An actual, decent VC would just give you $25K as a grant.