Deal just don’t always fall through…. Guess that’s the best way to describe June. As we were very enthusiastic about two new deals, both didn’t make it through to the finish line. The first one of these deals, we were to be their first investor, and although we had an agreement about the money invested and equity, just the “simple” term sheet turned out to be a hurdle the entrepreneurs couldn’t make. For us it was a standard term sheet, being used for almost a dozen start-ups and never turned out to be a problem.
Who were to blame? Quite often bootstrappers and start-ups have not necessarily the means to ask for professional and adequate (legal and business) advice, and rely on friends and family to counsel them through this unfamiliar and territory. That in our experience is quite often not the best guidance, but based on and fueled by emotion. Also incubators might have a stake, and might not always be unbiased in reviewing deals. From our end, we decided not to engage in any further discussions as we were not willing to compromise the used and proven term sheet format.
So, who were to blame? Does it matter? We all have different comfort zones, and what ever happens, we need to stay close to that when it comes to deal making.