“$40k for 15% equity” Cooed the smooth talking angel investor. “We will take over the world together and I will make both of us very rich”.
It was a cold dreary day and as “Entrepreneur X” sipped his coffee, he contemplated selling a stake in his company to the smoothest talking angel investor he ever had the pleasure of meeting.
The percentage looked fine, the terms were great, but something didn’t feel right.
As Entrepreneur X gazed out the window, mindfully mulling over the decision, the waitress came back and refilled their mugs. The investor took a sip and began screaming at the waitress. Apparently she accidentally gave the investor decaf instead of regular. The child-like behavior of the investor brought Entrepreneur X crashing back to reality. If the investor cracked that easily over coffee, how was he going to handle things if shit hit the fan with his venture?
“Entrepreneur X” immediately stood up and apologized for “his friend”, left a huge tip (my favorite part of this story), and walked away. He ended up bootstrapping the startup himself.
Taking an investor onboard is a lot like being married. It’s something that can be fantastic, it can improve your quality of life, and it can be a great source of encouragement if you “find the one”. On the other hand if you settle for someone because it’s easy, it can be hell.
My question for TSF readers is “Have you ever had to turn down funding”?
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You can follow us on Twitter @startupfoundry. I would love for you to share your stories in the comments, or get in touch with me personally at firstname.lastname@example.org.