Founders, vet your Venture Capitalists before receiving fundraise from them!
⚔️ Fundraising as a Weapon: Explore the unsettling possibility of investors using the fundraising process as a strategic weapon to hinder a startup's progress vis-a-vis its competitors, raising ethical concerns.
💰 Unethical Tactics in Deal Terms: Discuss the common scenario where investors might sign a term sheet, only to later introduce unfavorable terms or lower the valuation as the startup approaches financial constraints, creating a challenging situation for founders.
🌐 Power Dynamics in VC Relationships: Illustrate the power dynamics between investors and startups, drawing parallels to a situation where a starving person in a desert becomes increasingly dependent on the resources held by the investor, emphasizing the imbalance of leverage.
🕵️ Due Diligence on Both Ends: Emphasize the importance of mutual due diligence in the VC-founder relationship, likening it to a two-way pitch where founders evaluate investors just as much as investors evaluate founders.
❤️ The Dating Analogy: Highlight the analogy of the VC-founder relationship to dating, underscoring the need for founders to understand the investor's priorities, biases, and reputation, ensuring a partnership that aligns with the startup's values and goals.
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