Jan 24 2007

I Was “De-VC’d” What Do I Do Now?

Question: I was deVCeed. My VC just one day said that he does not want to do it anymore and wants me to pay back investment that they made. That’s it?

Our Take: Ouch. Something here isn’t right; start up investments are not like banks. We can’t invest in you one day, get tired and “withdrawal” our money the next. Standard financing documents don’t have this mechanism in them, unless you count redemption rights which are triggered by a certain date in time and rarely used. So bottom line, my guess is that your VC doesn’t have the rights to simply say “I’m done, give me my money back.” Either way, we wish you good luck.