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by jaredmck 4576 days ago
Terrible terms will attract terrible companies.
1 comments

Why do you think our terms are "terrible"?
Terrible is a strong word, but I don't think these terms are good for lots of companies. Each company is at a different stage when they first start raising seed funding. Some companies might just be worth 1 MM, but if you have a strong team, great technology, a workable plan, and early customer interest/revenue 1 MM is a horrible deal. In my opinion these terms are great for some ventures and absolutely horrible for others. I think the quick decisions are great, but I would think it would be more fair and equitable for you not to box the valuations. Perhaps offering a tiered option where higher value ventures take a little longer to evaluate, but I think boxing the valuation will have you miss the best companies. My two cents anyhow.
Agree with you that for it's not for everyone but for most early stage startups, it's a great deal.

For the others, Kima Ventures still exists and we are investing at differents valuations (lower and higher)

I think it's best for super early stage ventures. If you're much further along, it's going to be a bad deal and possibly deter any future investment in your company due to the dead money (lack of follow-on).
How did you guys arrive at 15% for 150K?
We wanted to call it Kima15 so it's 15%. Good answer? ;-)

More seriously. We know the market better than many angels and we are investing in any country of the world. This offer was already been accepted by a lot of awesome founders building big things.

In Canada most startup founders won't be able to score a deal like the one you offer. I really applaud your approach and willingness to fund companies all over the world. I was expecting this to be a US-only thing. I was pleasantly surprised.
We already invested in Pakistan too ;-) so nope, it's for everyone ;-)
Which market? You mean the worldwide market. If I had to guess, I'd say you are probably 60% EU + Russia, 10% Israel, 10% US, 20% other. Certain things might make sense in other places that don't make sense in the US.
You can't imagine how most US startups will be happy to get that deal. There are thousands of startups trying to get funding desperately in the US too There are also founders who are not interested to lose their time by pitching many VCs...and prefer to get that term in 15 days instead of better terms in 5 months...
Thanks for explaining. These deals are such an opaque market that first time entrepreneurs have no idea what is good and what is bad.
My worry would be the board seat.

If I were to go out on my own, I'd quite possibly take those numbers ($150k for 15%) pre-MVP if it meant 2 years of autonomy. I wouldn't give a board seat up, though. I also think $100-150k per founder is a more reasonable infusion (1-2 years).