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A Guide to Preemptive Funding Offers

90 pointsby akharrisover 6 years ago

3 comments

AndrewKemendoover 6 years ago
<i>To be clear, an offer is only an offer if it is a term sheet. Anything short of that is an attempt to get a founder to reveal more information.</i><p>Good succinct point that I think gets lost in the shuffle of founder optimism when fundriasing.<p>That said, my entire mindset around funding a company has shifted after having gone through the spanking machine a few times.<p>I&#x27;m convinced that the entire process of hot intro &gt; send deck &gt; partner pitch &gt; term sheet &gt; shop the term sheet &gt; revise deal &gt; do deal &gt; press release etc... is basically a waste of time if you want to build a massive paradigm shifting company.<p>It&#x27;s just a process for the founders to grow their network and build the signals for major corporate acquirers. You&#x27;ll get market standard terms and have spent a ton of time away from your product. You&#x27;ll go back to work, build up the team, get enough traction in a niche need to look good for a acquisition by FANG.<p>It&#x27;s basically the process for being in the feeder league for being a rookie in the Big Leagues. If that&#x27;s what you want, then great.<p>If you intend to completely upend how business is done, there will be a lot of these preemptive offers, IMO it&#x27;s the best signal that you&#x27;re on to something completely massive.<p>Said another way, if you aren&#x27;t getting preemptive offers, your best long term outcome is likely a middling acquihire.
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docker_upover 6 years ago
I&#x27;m generally wary of any advice given by people who inherently need to talk their book, especially VCs like YC, however blog posts like this are genuinely helpful. They set the ground rules that appear to be fair for everyone, and if some unscrupulous VC tries to bully a young founder, she just needs to cut and paste the URL for this article and it will instantly shut the VC up.
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gojomoover 6 years ago
YC blog&#x27;s wispy-dark-grey text on a light-grey background is a bit hard to read. I don&#x27;t recall noticing this earlier. Is it a recent change?
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