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The Funding Bill of Rights

The Entrepreneur’s Bill of Rights The Venture Capitalist’s Bill of Rights
Article 1 The right to own 50% or more of his/her company The right to make large returns
Article 2 The right to take only as much money as needed The right to allocate our time to where we can generate the largest returns for our customers
Article 3 The right to get something in addition to money from your investors The right to be engaged with your portfolio company to understand and  be consulted on strategic issues and options
Article 4 The right to insist that your investors stand behind you in later rounds The right not to have your money pissed away
Article 5 The right of the founder to remain CEO The right to replace the CEO for not getting the job done
Article 6 The right to make decisions and run your business The right to hold management accountable for building value in a timely and measurable manner
Article 7 The right to a two-way dialogue The right to hear the truth as soon as it becomes known – clearly, directly and without spin.
Article 8 The right to say when you exit The right to achieve a timely exit
Article 9 The right to protect your investment The right to protect your investment

Comments»

1. Stephen Hoffman - January 7, 2010

Well, this pretty much sums up the dilemma. As an ex-entrepreneur now VC, I would only add that the physical world still follows certain laws (Newtonian physics, thermodynamics, supply and demand, etc.), one of which is the Golden Rule of Venture Capital – “he who has the gold, makes the rules”.

Entrepreneurs always have the “right” to fund their companies with non-venture money. They can certainly maintain more % ownership that way.

2. Why a VC is A Great Seed Investment Partner « Ready,FIRE!,Aim - May 17, 2010

[...] The Funding Bill of Rights [...]


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