Re:Ask YC: Advice after receiving seed funding offer?
by SwellJoe on Thursday May 22, 2008 @06:11PM
(#197608)
The deal is bad on all counts, as others have mentioned, but the board provision is simply horrible for seed level investment (actually, I would never accept a board provision like that for any level of investment).
You're effectively selling your company for $25k. You no longer own the company if the investors hold two seats on the board to your one (and if they get veto on who the outsider is, they definitely hold two seats).
You are always allowed to negotiate until paper is signed (or until you've shook hands on the deal), but it sounds like these folks are either testing your mettle or just hostile investors. Either way, it seems a little problematic.
You're effectively selling your company for $25k. You no longer own the company if the investors hold two seats on the board to your one (and if they get veto on who the outsider is, they definitely hold two seats).
You are always allowed to negotiate until paper is signed (or until you've shook hands on the deal), but it sounds like these folks are either testing your mettle or just hostile investors. Either way, it seems a little problematic.