On Jun 4, 2007, at 8:07 AM, Mark Waser wrote:
(Depending on your specific type of interest in a company, an
argument can be made that warrants can be more valuable than
equity.)
Warrants have the same control problems as options do -- magnified
by the fact that they are transferable. They are definitely not
what I would call acceptable for this purpose.
Eh? What is the problem with them being transferable? Of what value
are these instruments to anyone if they are not ultimately
transferable? This is the kind of "control freak" tendency that
makes many startup ventures untenable; if you cannot give up some
control (and I will grant such tendencies are not natural), you might
not be the best person to be running such a startup venture. If I
was a VC looking at your company -- not a foreign role for me -- the
fixation on that aspect would raise red flags.
Blue sky ventures and "maintaining control" are pretty much in
opposition to each other if you do not want to marginalize your
funding opportunities. The lack of intrinsic capital is going to
make things tough, because the only real currency you have *is* control.
Cheers,
J. Andrew Rogers
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