Sure, but valuation is probably the biggest one. Why aren't we seeing lower valued companies then with non-SV investors?
The whole point of Andreessen's comment is that companies would have little choice. It doesn't follow that valuation, the biggest term, would be magically exempt from this renegotiation tactic.
"Sure, but valuation is probably the biggest one."
No, it's really not. If someone offered me a sky-high valuation but demanded 15 board seats I would be pretty foolish to blindly accept. I'd have just given up control of the company. Or what about the specifics of any anti-dilution provisions?
"The whole point of Andreessen's comment is that companies would have little choice. It doesn't follow that valuation, the biggest term, would be magically exempt from this renegotiation tactic."
If valuation is not the most important term to the investor, then it's it's not the one they have to play hardball with. It's possible that the companies are simply blinkered by the vanity around huge numbers and not paying attention to the other factors.
In any case, if I want to later on assume more control of the company I can offer a ridiculous (and unsupportable) valuation and then exploit other mechanisms via a subsequent down-round to attain a larger share for myself. Some people might call this unethical, others might call it business-as-usual.
Comments
Sure, but valuation is probably the biggest one. Why aren't we seeing lower valued companies then with non-SV investors?
The whole point of Andreessen's comment is that companies would have little choice. It doesn't follow that valuation, the biggest term, would be magically exempt from this renegotiation tactic.
No, it's really not. If someone offered me a sky-high valuation but demanded 15 board seats I would be pretty foolish to blindly accept. I'd have just given up control of the company. Or what about the specifics of any anti-dilution provisions?
If valuation is not the most important term to the investor, then it's it's not the one they have to play hardball with. It's possible that the companies are simply blinkered by the vanity around huge numbers and not paying attention to the other factors.
In any case, if I want to later on assume more control of the company I can offer a ridiculous (and unsupportable) valuation and then exploit other mechanisms via a subsequent down-round to attain a larger share for myself. Some people might call this unethical, others might call it business-as-usual.
Preferences can be just as big a deal.