The fact of the matter we are all professionals and everyone's job is to protect their interests.
The CEO's job is to get the best deal for existing shareholders and optimize the growth. The investor's job is to buy in at the lowest price / strictest terms they can get away with. When a better deal comes along for the company and the investors cannot match it they start coming up with all sorts of phony excuses to buy in at the original lowball offer. If you feel strongly enough about the company don't be a cheapo and match the new offer. If "it does not fit the structure of your fund" then move on to the next deal.
Jeff Bezos walked away on the offer by Olympic Venture Partners (OVP) when Kleiner jumped in and outbid them big. I heard this in a talk by OVP partner who complained that John Doerr could make what he believed to be an "outrageous" offer because the fund already had Netscape IPO exit and could take much greater risk. Guess what, Jeff Bezos did the right thing for himself and his existing investors and employees.
VCs walk away on term sheets all the time and typical deal structures favor them anyways. The deal is done when the legal papers are signed and the check clears. Nobody should act as though they are entitled to anything, whether they are VCs or CEOs.
The CEO's job is to get the best deal for existing shareholders and optimize the growth. The investor's job is to buy in at the lowest price / strictest terms they can get away with. When a better deal comes along for the company and the investors cannot match it they start coming up with all sorts of phony excuses to buy in at the original lowball offer. If you feel strongly enough about the company don't be a cheapo and match the new offer. If "it does not fit the structure of your fund" then move on to the next deal.
Jeff Bezos walked away on the offer by Olympic Venture Partners (OVP) when Kleiner jumped in and outbid them big. I heard this in a talk by OVP partner who complained that John Doerr could make what he believed to be an "outrageous" offer because the fund already had Netscape IPO exit and could take much greater risk. Guess what, Jeff Bezos did the right thing for himself and his existing investors and employees.
VCs walk away on term sheets all the time and typical deal structures favor them anyways. The deal is done when the legal papers are signed and the check clears. Nobody should act as though they are entitled to anything, whether they are VCs or CEOs.