Investors overvalue capital investment. Give them an inch and they’ll take a mile. Do you feel ill prepared to negotiate?
4 answers from the community
<p>Who has the power really depends on how "hot" your company is. This is always why they say to raise money when you don't need it.</p>
<p>But overall, yes, like anyone, they're trying to get the greatest value for their dollar.</p>
Exactly. No investor today who can afford to would walk away from a hot company like Snapchat; right now their valuation is too high, but every investor would love to take part in their funding rounds if they could afford it.
If your company is hot, it's easy to get good terms because you can go to another investors if one tries to give you shitty terms. It's sort of like how a wealthy man or hot woman have many options for a mate; they don't have to settle for someone beneath them.
I do feel ill prepared to negotiate
Not ill prepared - I'm not raising now but would make time to read and prepare beforehand when I am. But i am resentful of the time, energy, and distraction from work that it will take to raise.