VCs Making Life More Difficult For New Entrepreneurs

from the check-out-them-clauses dept

Venture Capitalists for years have been complaining about how entrepreneurs had too much control over negotiations in the dot com craze. So, look at how gleefully they’ve started to slip in all sorts of mean nasty clauses in new deals – in order to make the deals less risky for themselves. I’ve always been a fan of the full ratchet clause. This is, basically, the “squeeze the entrepreneur” out of his shares clause in the case of a down round. It’s also what may eventually end up destroying Idealab. On a side note, for those of you who still want to deal with such lovely venture capitalists and their clauses, Silicon Valley is still the place to be. Second place goes to my other favorite city, New York, which barely edged out Boston.

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