Venture Capitalist firm wants options? Bad or good?
A VC want a bunch of options to be active in the investment – non negotiable. The suggested deal is that they get a bunch of options, guarantee a part of the investment round (say 25%) and then collaborate with us to raise the rest. Their active involvement will be “long term” with a suggested horizon of 5 years (how is that put in the term sheet?) and they will take the major part of the work load raising money, from their own fund and their partners, down the road. Isn’t is reasonable to argue that they should take their profit from their investment and shove the options? Isn’t their suggestion the same as charging a consultancy fee for managing their investment which I understand is bullshit? We would prefer them to not be active and just give us the money.
Anyone with experience? Tips?
This question is in the General Section. Responses must be helpful and on-topic.