Attention Startup Founders

Here at Punch, we’ve worked with startups who were so grateful to be receiving VC capital that they did not consult with a legal expert on the terms of the term sheet. They very much regretted it later.

We recently worked with a startup that neglected to set a limit on the level of financial disclosure required by the VC. This resulted in a relationship where the VC was riding the startup constantly with questions related to their numbers and statements, to the point of being dysfunctional and distracting from running the business. The startup would have been much better off if they had narrowed the scope of disclosure required by the VC during negotiations.