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That's not the point, A16Z is the lead on their key deals. The lead sets the price/terms and has significant control over who else gets access...
by dmk23 12y ago
That's not the point, A16Z is the lead on their key deals.
The lead sets the price/terms and has significant control over who else gets access...
- trhway 12y agosome of the SV VC have been taking such lead/guide role wrt. newly coming external money. A16Z seems to have decided to fight the wave instead of riding it.
- adambenayoun 12y agopmarca only highlighted a practice that he thinks is unethical. Lure a startup into accepting a term sheet at a crazy high valuation and get them into a no-shop clause. Once they break off with other investors, renegotiate the terms on the term sheets to a lower valuation. Since you're in a no-shop clause, you have no leverage over the VC and you have 2 options: Accept the lower valuation because there are no competition or reject the term sheet and start over. I bet lot of companies go with option A. In the valley this is unacceptable and I am sure if someone would do that thing, companies wouldn't deal with that VC. a16z sets price on the key deals but they don't renegotiate the terms later on as a tactic. This is the _key_ difference.