Through the investors' eyes, "the proceeds from the sale wouldn't even pay for our time and legal fees in reviewing and signing the transaction documents." That's basically it.
Edit: this is very snarky and not intended. I know the CEO of a failed GC company and his experience seemed neutral to positive; they’ve also bid on something where I knew the founder and generally came across very well also. Trying to discuss the fact pattern and underlying principles, not the specific people involved.
——
This thread comes off as very tone deaf.
As a small minority shareholder the fees to receive a $800k wire round to zero. Plus it’s not $800k, it’s $800k plus whatever the preferred instrument yields on top.
This CEO seems super slimy and the story doesn’t add up. Much more likely he’s lying for some reason or other.
I don't think anyone's arguing about the wire fees, it's about the tens of thousands of dollars of lawyer time/fees required to hammer out a bespoke contract for what the $800k represents, the terms under which it is changing hands, etc etc.
It would be different if you were an angel and that represented more 1% of your total portfolio, but it's just not the case when it's these big VCs.
They still have to sign the transaction documents. The only difference in the paperwork is a 0 next to their name instead of $800,000. And I guess the onerous work of cashing a check.