The crush that comes with hosting a conference such as Structure means that everything else in life (and work) takes a back seat. It is perhaps one of the reasons I never got around to writing about a lot of things that I spotted on my information stream. One of them was about a European venture capital firm announcing that it was going to write the startup financing term-sheet in plain english. It is not the first time, a venture capital firm or an investor has reaped the benefits of offering “founder friendly” term-sheets.
Term-sheets that put founders first and are written in simple english versus lawyer and banker speak are a welcome development in the startup process. Starting a company process is coated in obfuscation and slights of hand. As a journalist-turned-founder, I struggled with the legalese and had it not been for a few real friends who happen to be lawyers, I wouldn’t have understood it at all. That said, term-sheets are simply words exchanged at the start of a very long twisted, confusing and arduous journey.
Anyone can say they are founder friendly, but are they really? Will they be friendly when things are not going right? Will they tell you when you are screwing up but will also offer help. Will they pick up the phone at 2 am when you are having a panic attack? Will they still be as enthusiastic about your startup, even though a few years have passed, you are not Facebook and there are many more newer shinier, pretty things. It is very easy to separate the ones who are in for the transactions, and others who are actually founder’s friends.
What a founder should look for is investors who epitomize the notion that being “founder friendly” is much more than just words on a piece of paper. Next time, if you are out raising money, make sure you ask the questions of the guys who didn’t make it and fly away into the sunset, you know the ones who weren’t the proverbial Kevin Systroms or Max Levchins. That is how you will find who is really founder friendly and who isn’t.