Tuesday, April 03, 2007 by Dave Winer.
Rick, as always, has good advice for entrepreneurs.
Rick says you should pin them down. And never tell the VCs which other VCs you're talking to, until you get a term sheet. Good advice. Financing is a negotiation. If you were buying a car, you wouldn't tell a dealer which other dealers you were talking to, would you? Remember, they do this for a living, they know a lot more about it than you do. And they know when you're bluffing, maybe even when you don't!
I go further in my advice to entrepreneurs. Even after you get an offer from a VC, very carefully find out if their vision of the company agrees with yours. If it doesn't there's a pretty good chance you're either going to end up working for the wrong company (the one that agrees with the VC's vision) or out on the street looking for a job, with your idea tied up in a company whose vision you don't agree with.
I've seen this happen too many times -- the entrepreneur feels his or her vision has been ratified because the money has come in, but the VC was thinking something else. The VC often wins this struggle. Better to figure this out before you become partners.