Entrepreneur Finance Ratchet 
Both Sides of the Table
SEPTEMBER 5, 2012
My initial reaction to Adeo when we spoke was that while it may have solved some issues (debt versus equity) it didn’t solve the ones that I’ve been warning entrepreneurs about most loudly. Was Paul Graham right in his “high resolution” financing post? But entrepreneurs – convertible notes have no MINIMUM!
Both Sides of the Table
DECEMBER 11, 2022
Almost no financings, many VCs and tech startups cratered for the second time in less than a decade following the dot com bursting. I was in it for the love of working with entrepreneurs on business problems and marveling at technology they had built. Starting in 2009 I began writing checks consistently, year-in and year-out.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
Both Sides of the Table
SEPTEMBER 18, 2014
At an accelerator … Me: Raising convertible notes as a seed round is one of the biggest disservices our industry has done to entrepreneurs since 2001-2003 when there were “full ratchets” and “multiple liquidation preferences” – the most hostile terms anybody found in term sheets 10 years ago.
Feld Thoughts
JUNE 10, 2022
Rather, when you have a choice between a financing at a lower valuation and a financing with all kinds of crazy structure to try to maintain a previous valuation, negotiate the best price you can but do a clean financing with no structure. So, as an entrepreneur, I encourage you to deal with reality.
Tim Keane
JANUARY 12, 2010
Please see later version of this post on May 16, 2010 Entrepreneurs are often not experts in the area of term-sheet negotiations and all of the surrounding issues. Investors sometimes “present” the terms they’d like and expect the entrepreneurs to react. Term-sheets and Valuations: Thinking about Negotiations.
Both Sides of the Table
MAY 30, 2015
I’m so tired of seeing young entrepreneurs get screwed by their angel investors on convertible notes and I know I can’t convince you not to do it so I’d like to offer one simple bit of advice to help you avoid getting screwed (at least on one part of your note). If you raise at a lower price they will own more than 9%.
David Teten
JANUARY 13, 2015
Does it hurt ‘anti-pattern’ entrepreneurs? Next, I would push ‘anti-pattern’ entrepreneurs to remove the convenient (and often true) excuses for not warranting investment. I know we romanticize the LGBT entrepreneur making an app for the LGBT community, but too many of our ideas are “ghettoized” and not seen as “big ideas”.
Expert insights. Personalized for you.
354 
Let's personalize your content