Comments on: Can I lose my company using VC? http://nichemarketingstore.info/uncategorized/can-i-lose-my-company-using-vc Finding the Need and Filling it! Thu, 09 Sep 2010 20:51:57 +0000 http://wordpress.org/?v=2.5.1 By: T http://nichemarketingstore.info/uncategorized/can-i-lose-my-company-using-vc#comment-279 T Thu, 22 Jan 2009 17:28:59 +0000 http://nichemarketingstore.info/3/can-i-lose-my-company-using-vc#comment-279 Getting assistance from a Venture Capital can be risky, and not just the possibility of getting kicked out. The plus side is that your dealings with them would be negotiated, meaning you could ascertain from them, using your own legal counsel, up front if losing your company to them is possible. The bigger danger is losing creative control and direction in your company. VCs can and do assign directors/managers, etc to "help" oversee the business. It may not take too long before they are running the show, even though you still 'own' the company. Using a VC group doesn't have to be bad, but you should look at other options: business loans from the bank, grants from government or private sources, private investors (including so-called 'angel funding'). Angel funding will also contain some kind of part-ownership deal, but again, this is all negotiable. If these other options don't pan out, you can still investigate the VC route. As far as an attorney goes, business law is a common field. As you grow, you may wish to hire a business lawyer onto the payroll. You can also use any firm that specializes in business law. Just ensure that you check them out thoroughly, as you would any potential employee.<br><b>References : </b><br> Getting assistance from a Venture Capital can be risky, and not just the possibility of getting kicked out. The plus side is that your dealings with them would be negotiated, meaning you could ascertain from them, using your own legal counsel, up front if losing your company to them is possible.
The bigger danger is losing creative control and direction in your company. VCs can and do assign directors/managers, etc to "help" oversee the business. It may not take too long before they are running the show, even though you still 'own' the company.
Using a VC group doesn't have to be bad, but you should look at other options: business loans from the bank, grants from government or private sources, private investors (including so-called 'angel funding'). Angel funding will also contain some kind of part-ownership deal, but again, this is all negotiable.

If these other options don't pan out, you can still investigate the VC route. As far as an attorney goes, business law is a common field. As you grow, you may wish to hire a business lawyer onto the payroll. You can also use any firm that specializes in business law. Just ensure that you check them out thoroughly, as you would any potential employee.
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]]> By: imisidro http://nichemarketingstore.info/uncategorized/can-i-lose-my-company-using-vc#comment-278 imisidro Thu, 22 Jan 2009 16:43:59 +0000 http://nichemarketingstore.info/3/can-i-lose-my-company-using-vc#comment-278 I suggest you read Business 2.0 or Forbes or Fortune magazines for ways to deal with VCs. VCs are not out to get you or steal your livelihood -- they are out to get back their investment on your business. As long as you help them grow their investment, then you're golden and useful to them. But if you are viewed as a stumbling block that prevents them from getting their money, then they kick you out, even if the whole business is your idea and you founded it from your sweat and blood Remember, the VCs are now funding your business. It is THEIR money that your business is using. Even if they don't kick you out, they can destroy you and your business by simply pulling out of your company. Plus, they can play nasty and make sure that you don't get funding in their town again. If you're asking this question, I suggest you really study long and hard the risks you are opening yourself when you get VCs to finance your business. When dealing with VC you need to watch your back. They may allow you to control majority of the company, but it doesn't mean you're safe. Don't merely focus on ownership percentage. Look closely at the term sheet -- some VCs tuck in provisions that basically give them power and the founder basically a mere figurehead. For example, the term sheet may give VCs approval power for expenses $5,000 and over. Better find a great lawyer who has the experience in dealing with VCs to help you<br><b>References : </b><br> I suggest you read Business 2.0 or Forbes or Fortune magazines for ways to deal with VCs.

VCs are not out to get you or steal your livelihood — they are out to get back their investment on your business. As long as you help them grow their investment, then you're golden and useful to them.

But if you are viewed as a stumbling block that prevents them from getting their money, then they kick you out, even if the whole business is your idea and you founded it from your sweat and blood

Remember, the VCs are now funding your business. It is THEIR money that your business is using. Even if they don't kick you out, they can destroy you and your business by simply pulling out of your company. Plus, they can play nasty and make sure that you don't get funding in their town again.

If you're asking this question, I suggest you really study long and hard the risks you are opening yourself when you get VCs to finance your business.

When dealing with VC you need to watch your back. They may allow you to control majority of the company, but it doesn't mean you're safe. Don't merely focus on ownership percentage. Look closely at the term sheet — some VCs tuck in provisions that basically give them power and the founder basically a mere figurehead. For example, the term sheet may give VCs approval power for expenses $5,000 and over.

Better find a great lawyer who has the experience in dealing with VCs to help you
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]]> By: Jolly1 http://nichemarketingstore.info/uncategorized/can-i-lose-my-company-using-vc#comment-277 Jolly1 Thu, 22 Jan 2009 16:04:59 +0000 http://nichemarketingstore.info/3/can-i-lose-my-company-using-vc#comment-277 Always maintain majority share of the stock, and you'll be fine. That's the rub, though. VC will likely want majority stake as well. Avoid this.<br><b>References : </b><br> Always maintain majority share of the stock, and you'll be fine. That's the rub, though. VC will likely want majority stake as well. Avoid this.
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