Do you know a VC that is ready to publish their investment agreements? I haven’t seen too many. And if you ask about this, some venture capitalists don’t like the question. They start to explain, how it is a benefit of both parties to have confidential agreements. I agree there are
details that can be confidential, for example valuation, but is it really necessary to hide all terms and conditions. Would it be good for entrepreneurs and for the whole startup business to know openly terms and conditions from different companies before any decisions?
Why I raise this questions. Because many entrepreneurs feel they have been cheated when they finally understand all details, e.g. liquidation preferences, anti-dilution, and decision veto terms. I think it is not so much a problem with top tier VC’s that really make success stories. But there are so many tier 2 or lower VC’s (e.g. local ones in Europe and elsewhere) that don’t make too many success stories and they play with terms and conditions to get ROI for themselves but nothing for founders or business angels that have invested before VC’s. I know many entrepreneurs or business angels who have done big mistakes with their first company. Often people are not willing to talk about these experiences.
Grow VC is going to use public investment terms and conditions for its investment concepts (e.g. the new model we launch in January) and we also publish guidelines for angel investments. We also try to develop concepts that put all parties to more equal position. We believe it is also the best for businesses. It must the common interest of all parties to get benefits from the success of a company. And we want that all parties can comment and develop these concepts.
1. Mass collaboration is powering the new economy
