Should the VC pick the Legal fee tab of the startup? Yes, it happens in the Valley

A very interesting short conversation with Bijan Sabet (@bijan), General Partner, Sparkcapital about the changing workings of VCs with startups (for the better) in the US. He led investments in Twitter, Tumblr.

  • VCs need to improve their image with  entrepreneurs
  • SparkCapital was the first in the industry to waive the requirement that startups pay a VC’s legal fees after a funding round closes. This made him and SparkCapital unpopular.
  • Spark stopped mandating non-compete clauses for founders and their employees as far back as 2008. In California non-competes are unenforceable, and thus largely non-existent in agreements.
  • VCs aren’t demanding as large stakes in the companies and are less insistent on board seats.

Such terms are so encouraging to an entrepreneur and the entire startup eco-system.

Source: Pandodaily



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