Member-only story
How To Decide If You Should Take An Investment Or Sell Your Company
“I’m sorry Brett, but we’re not going forward with the investment,” “Robbie” said to me. The week before Robbie and the other members of the investment syndicate had signed the term sheet. And now they were pulling out of the deal.
I spent the next hour on the phone convincing Robbie to stay in the deal. Robbie agreed to talk with his partners about staying in the deal.
What would happen to Robbie’s fund if they pulled out of the deal: Nothing. Robbie and his partners could walk away and have no real consequences to their actions.
Here’s the thing: Your term sheet is a non binding document.
You may have noticed that there was a statement in the term sheet that you signed saying something like, “This is a non binding document.” In other words, either party can walk away from the agreement before funding closes.
I called Gill, one of our existing investors, after I got off the phone with Robbie. Gill’s response was, “We’re seeing this more and more that VCs are walking away from signed term sheets.”
You need to do what’s right for you.
Now I’m not saying you shouldn’t take your commitment to the signed term sheet…
