[msuster]

Fair comment. I could see why it might come across that way.

The impression I meant to leave was that I risked losing out on the deal all together because the CEO could have simply done the deal with the other investor.

I would rather that have happened than to screw over the VC who convinced me to look at the deal in the first place.

[larrys]

I agree with what you did and it's what I would have done no question. But I have to say that loyalty and that type of behavior has definitely hurt me business wise over the years.

I wonder how much of that is "doing the right thing" vs. protecting one's reputation so you can continue to do deals. (And you clearly referred to protecting reputation ..)

If you are just interested in "doing the right thing" then the issue of protecting one's reputation wouldn't even come up in the discussion, right? (And nothing wrong with sounding "pollyannish"?)

I wouldn't have done what your friend did at the dance. Not because I'd be worried about reputation but because it would make me feel bad to do it. I wouldn't want it to happen to me (empathy). I can tell you have empathy just by the way you wrote the post. I'm wondering if you feel a need to cloak it in "reputation" and are you sure that's as big a motive as you make it out to be? As if it won't be manly or something.

[nhangen]

I suppose it depends on what you value more - maxing your business potential or maintaining your integrity.

[cperciva]

Right, despite the example being a bit off I can see what you were trying to say.

It seems to me that this situation started when the company had a signed term sheet but still went around to VCs trying to interest them in investing. Is this normal? (I'm a bootstrapper, so I have no experience with these games.)

[msuster]

term sheets have "no shop" clauses which prohibit you from talking with other investors. But they're pretty unenforceable so it happens anyways.

[cperciva]

Ok, thanks. I wondered if the etiquette was different in situations where the first VC was trying to put together a consortium.