Tim Bray explains venture finance.
I don’t know if I’ll ever go after VC funding again; I’ve nothing against the idea in principle, although the practice is often unpleasant. But if I do, and if I get a term sheet, and if we manage to negotiate away the differences, I’ll say something like this: “OK, it says here that you give us the money and you get this many points in the company plus your terms. How’s this: I’ll give you ten more points for the same money, but you take common shares and we’ll really be partners. Deal?” Then you’d find out if they were really entrepreneurial.
For the reasons he cites earlier in the post, investors and entrepreneurs aren’t always on the same side of the table. It’s that golden rule in action — “he who has the gold rules”.