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by coleslawfail 4658 days ago
Heh, seriously? I'm sure the valuation he gave Jack has nothing at all to do with it. Jack didnt need Vinod, big difference. Square would be Square without Vinod.
1 comments

KV offered substantially less of a valuation than other firms to lead the Series A.
And control provisions?

Jack was never going to see Bad Vinod. And he was never going to give up enough equity/control to let Vinod's ego run wild.

KV asks for less control provisions than other comparable funds. Indeed, we rarely even require a Board seat. Most often, the founder persuades us to accept one.
Or in the case of "experiments" KV insists on two seats and takes the option pool from founders at the seed stage.

I get why you are presenting the rosiest picture, but at least be honest that Bad Vinod exists and is pernicious for the firm and many early founders.

These "experiments" are normally companies that no other fund on the planet would finance, as they are extraordinarily risky. In those cases, KV does expect greater equity (due to risk and the fact that nobody else will support the company) than a standard seed or Series A. Would you prefer we just decline to fund them like every fund?
With how much liquity floats around today, there's no such thing as too risky. No, Vinod jumps in early exactly to maximize leverage and over the founders and other investors. Why not simply treat them like any other seed? Then leverage over time with pro rata rights? As an angel, did you ever require insane positioning? And angel investing, as you know, is pretty risky. Seriously, two seats, take a step back see that you are justifying a terrible position for founders right out if the box, most especially when they take the options pool from their shares as well. You talk like it's charity when it's robbery, and then of course Vinod's ego runs wild on them.

I note here you keep failing to answer my questions. Bad Vinod is real and it's not just the experiments. With first time founders, the word is to be very careful with KV and many choose to avoid altogether. New founders, less connected in the Valley, are especially vulnerable.