[robocat]

You said “It is considered bad form to share the contents of a termsheet with other investors” and “You do not want to be seen ‘shopping around’ your unsigned termsheet”.

The benefits to a founder of shopping around seem clear, so could you quantify the downside risks? Do the risks matter for a “hot deal”?

PS: Thank you so much for your awesome article: it is especially gratifying to see something that isn’t from the valley (I am in NZ).

[tomblomfield]

The downside in the extreme is that the original investor pulls the termsheet and you end up empty handed. I know of cases of this happening, but it's rare.

More commonly, you develop a bad reputation in the VC community, which is very close-knit. Next time you come to raise money, this can hurt.