New ask Hacker News story: Manipulated into taking a bad deal from an angel – will a VC will buy them out?
Manipulated into taking a bad deal from an angel – will a VC will buy them out?
2 by entrepooneur | 0 comments on Hacker News.
I’m 25 and am building a startup in the pet space that’s getting some serious traction rather quickly. When I was getting this company off of the ground I started talking to my mentor and his business partner about getting involved somehow. I threw out some hypothetical numbers on how much cash I would need to get started and some equity % ideas. They made me an offer that was on par with what I said I needed but for a 30% stake. I showed some interest but I didn’t think I was committing to anything. I definitely didn’t sign anything. I thought it was just simply an offer My former boss Brad is a good friend and just sold his company last year and is now a VC. Brad actually really likes this concept (he hated all the others). Last week we jumped on a call and he randomly made me an offer for 250% more cash at a 350% higher valuation for 25%. I thought my mentor and his partner would be happy for me and urge me to take the better offer from Brad because I knew they couldn’t match the amount of cash. They said I could include Brad in the round (meaning I’d give up 55% very early) but they wouldn’t budge on their offer or valuation. If I took his offer and not theirs they would see it as me cutting them out and as a betrayal. They told me Brad is just in it for the money and that they want to “help” with the business (they don’t really understand the venture capital world). Oh, and they want a 30% dividend paid quarterly. They are now strong arming me and manipulating me into signing a templated contract that they found online. I’m sick to my stomach over it. I can’t get rid of them. I can’t negotiate. They won’t sign or entertain a buy-sell agreement outlining how I can buy them out. Their response was “we are in it for the long term”. The only hope I have (in my mind) is if I can raise a round in the next year and have them bought out. I don’t see any other way.
2 by entrepooneur | 0 comments on Hacker News.
I’m 25 and am building a startup in the pet space that’s getting some serious traction rather quickly. When I was getting this company off of the ground I started talking to my mentor and his business partner about getting involved somehow. I threw out some hypothetical numbers on how much cash I would need to get started and some equity % ideas. They made me an offer that was on par with what I said I needed but for a 30% stake. I showed some interest but I didn’t think I was committing to anything. I definitely didn’t sign anything. I thought it was just simply an offer My former boss Brad is a good friend and just sold his company last year and is now a VC. Brad actually really likes this concept (he hated all the others). Last week we jumped on a call and he randomly made me an offer for 250% more cash at a 350% higher valuation for 25%. I thought my mentor and his partner would be happy for me and urge me to take the better offer from Brad because I knew they couldn’t match the amount of cash. They said I could include Brad in the round (meaning I’d give up 55% very early) but they wouldn’t budge on their offer or valuation. If I took his offer and not theirs they would see it as me cutting them out and as a betrayal. They told me Brad is just in it for the money and that they want to “help” with the business (they don’t really understand the venture capital world). Oh, and they want a 30% dividend paid quarterly. They are now strong arming me and manipulating me into signing a templated contract that they found online. I’m sick to my stomach over it. I can’t get rid of them. I can’t negotiate. They won’t sign or entertain a buy-sell agreement outlining how I can buy them out. Their response was “we are in it for the long term”. The only hope I have (in my mind) is if I can raise a round in the next year and have them bought out. I don’t see any other way.
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