HACKER Q&A
📣 reza362

Low Ball Offer from Shady Investor


I worked with a high profile investor over the last year. He gained access to my IP by promising to invest in my company. Then over time few times offered multiple way of partnership and then changed them. Till I got a low ball offer which is 9 times below his suggestions. I countered the offer. I am ready to move out from his premises as he gave me free office. I am confident he has made multiple million dollars from my work so far. What is best way to deal with this situation?


  👤 anonsivalley652 Accepted Answer ✓
0. Never "marry" an investor you're uncomfortable jumping into "bed" with.

1. Never work too close in proximity to an investor, or there's the potential for them to getting too hands-on or just showing up.

2. Ignore lowball offers. That's the initial round of "sucker offers." You don't need to take those seriously or let it challenge your value, because they're also probing for any weaknesses and your anxiety level/hastiness to complete a deal. I would politely laugh it off and make it clear I didn't just freshly fall off the turnip truck into the world this morning.

3. It comes across from what you're saying that you think you got played for a sucker, so it sounds like they don't respect you enough to pay you what you created. Is there any direct evidence of this rather than just suspicions? Are they supposed to pay you for them selling/licensing it? Do they keep you in the loop if there are licensees interested?

4. Licensing - Did you ask for royalties? Are there patents involved? Have a lawyer look-over any agreements, because you maybe owed payments.

5. I have to ask an obviously trivial question - This isn't like my mom's former coworker who claims her MBA classmate "stole her business plan/idea" for Papa Murphy's (yet didn't execute on it), right?

6. Handling the investor: there's basically three readily-apparent options:

i. Make no waves and never work with this investor again.

ii. Waste treasure on a lawsuit and find it difficult to ever get funding again.

iii. Ask around. See if anything unprofessional has happened to others in the portfolio. There maybe ways to compel them to behave more generously and professionally by social means.. because a VC's reputation is just about all they have, and they won't have a network without it.