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Entrepreneur, CEO, and business owner Jay Adelson (Equinix, Digg, Revision3, SimpleGeo) demystifies the start-up process by providing advice, tips, and answering questions. Ask Jay how to turn any business idea into reality: firstname.lastname@example.org, @jayadelson, or http://youtube.com/askjayadelson Read More
Successful entrepreneur and CEO, Jay Adelson, demystifies the start-up process by providing advice, tips, and answering questions. Today he discusses whether or not investors are out to screw you and your business.
Jay's Chalkboard Notes:
1. Investors job is to make $$$
2. Their goal is to get greatest ROI
3. They could take advantage of what you don't know
4. They default to terms favorable to them
5. Experience, mentors, advisers, and a corporate attorney will help you avoid this
6. Some investors sit on your board
7. Some are more valuable than others
8. Begin by seeing them as adding value
9. It's not personal
10. They're often right, so listen!
Your takeaway assignment based on today's question is to sit down with your attorney and review your term sheet. Try to avoid all loopholes and add provisions to protect you. Make sure both your termination is clear and change of control is clear. They aren't out to screw you, but they default to language that benefits them. If you are unaware of this language then you could find yourself in trouble. That is why you need a seasoned corporate attorney.
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