Venture pit dead entrepreneur "six traps" priority liquidation right pit dad

Venture capital pit dead entrepreneur's "six Traps" trap one: the preferential liquidation right wind investment and the enterprise financing agreement has one of the priority issues of liquidation. If the clause indicates that the liquidation relationship is "and", it means that when the investor finally liquidate the fish and bear the cake, not only can they get the initial principal, but they also get a stake. Even more frightening is that once this article, B-round investors will demand this right, C-round investors should have. As long as the bad head is open, it will only get worse. Keep in mind that each round of VCs will ask for at least the same good terms as the last round, and it will only be more beneficial to investors and more detrimental to the entrepreneur. Trap two: Exclusive agreement on the face of it, it is the company that gets the wind and the other competitors are going to be very far away. The reality is that companies tend to follow suit by signing "exclusivity agreements" and holding control tightly in their hands. For example, in every E-commerce subdivision area, there are eldest, second, old, old four, old five ... They all face a chance to compete for a listing. But if the deal is not signed, VCs may also be at the top three, then watch for a while and finally pick out a good focus, and the other two may be strangled directly. Trap three: Hanging in a tree many entrepreneurs in the financing, the most painful is difficult to get from the VC there is a happy saying: My project is good or not? Are you interested or not interested? For the recognition of good projects, VCs of course is a word: "Rob". But if you are not interested, or are still undecided, then you will not get a clear answer, their most hope is that you have been hanging in his tree. Trap five: Plagiarism entrepreneur thought some VCs will use investment as an excuse to "plagiarize" entrepreneurs ' innovative ideas and transplant them into other companies they've invested in. There is also a more shameless way, a venture partner steals the idea of the entrepreneur, find a few people to save a company, and then let the wind behind their own investment, deliberately generated a failure, the final venture into the company's money directly into the partner's pocket. Trap SIX: Grab class seize power this is the most common situation. VCs usually claim that they only share shares, do not control the day-to-day operation of the company, only a small number of seats in the board, to hear management reports. But VCs have a sword-"negative power". Open Venture Investment agreement, entrepreneurs will find that there is a lot of business related to the business, VCs have 1 votes veto rights. This is like an entrepreneur driving, but a VC can put on the brakes at the critical moment.