Raising that first round is hard, one would hope that with the experience, the subsequent rounds would be less challenging. However, each round and additional investor brings more partners into the business with what may be different end goals and needs than the founders. Knowing that negotiations are two-way streets can help a young company avoid some of these challenges.
Negotiating with potential investors is never easy. Here’s one option you never want to take off the table. Every once in a while there is a highly public kerfuffle among Silicon Valley investors that delivers an important lesson about funding for entrepreneurs. Last week it was Y Combinator founder Paul Graham’s leaked email warning start-ups not to take lowball offers from investors—and specifically from Google Ventures.
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