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Comment by Drbble | Hacker News Reader

To be clear, this article isn't telling CEOs not to negotiate or seek competitive deals. It is about not backstabbing business partners.

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Thank you. I wish more people saw it that way. I always believe in negotiating / seeking competitive deals. But once you agree a deal with people you honor it.

To be more clear (and I came back to edit for more clarity and saw your reply that paralleled my ambiguous construction) it's about the VC (you) not backstabbing your coinvestor. IF (and it isn't clear from my reading) the company didn't have signed papers with your first coinvestor, they are well within rights to drop the investor. But you have a responsibility to not abuse the trust the coinvestor gave you. If the company, gets a better whole offer, good on them. But they can't chisel apart the first offer.

How would you react in this situation:

1. You negotiate and have a handshake deal with a company for a round of funding.

2. The company gets an offer for a higher valuation from someone who wants in on the round.

3. The CEO asks you whether to take them or not, but basically leaves it up to you?

In other words, assuming the CEO didn't "backstab" you but rather sought your advice, would you be upset that he's even considering a different deal? Would you tell him he should take it, assuming the deal is still worthwhile for you? How would you react?

that is EXACTLY what happened in the situation I described. We hadn't yet signed the term sheet. So I told the CEO that I would understand if he went with the other firm. But that I personally couldn't be involved with the deal for reasons I described. Until a CEO has signed the term sheet (or gives you an email saying they will) I assume they are still negotiating with others.

I'm mostly interested in whether you would hold it against the CEO for asking your opinion on the matter. It sounds like you might be implying that the CEO shouldn't even be considering the decision, whereas I would assume a CEO working with you would want to feel like he can be open with you about his/her dilemmas.

Of course I might be really misreading here.

To be even more clear, its' not about the CEO in the story its about Mark not betraying his friend (e.g. going home with the girl who brought him to the dance) and instead going with another new VC.

The CEOs weren't brought to the dance, they could pick whichever VC they wanted to. It's just that he would have left the deal if they hadn't picked his VC.

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He also throws in a story at the end about another company who signed a term sheet, then reneged on it and considers that as a black mark on their reputation. Maybe it is, maybe it isn't but its a separate story.

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