Ask HN: Being stubborn with investors
A big part of the experience has been dealing with the volume and variety of advice we get - when to act, when to ignore, when to placate.
Well, an angel investor who has promised (terms written etc) to lead and anchor a seed round for us is asking us to fundamentally change our product and has said that unless we do it, he doesn't want to get involved anymore.
To summarize as briefly as possible: We make private social networks and the investor wants us to limit who can create a group because he thinks it's too risky to allow any user to make a group (in case they make an offensive/inappropriate group). We think that there are ways to address that risk without limiting who can make a group. We have a flagging/moderation tools for the customer, standard social networking TOS that indemnifies the company and customer for any content a user makes, a usage policy developed with the customer, and all users use their real names. This is standard practice with Yammer and other competitors. Limiting who can create a group does not stop anyone from posting inflammatory content as post, event, or comment. Limiting who creates a group creates an unnecessary barrier for users. We have confirmed this with current customers.
The investor either does not understand or sees something we don't because this is not enough for him. He insists we're wrong and believes it's a "no brainer."
Is he right? How do handle this situation? We want (need) him involved but perhaps he does not share our vision? Or perhaps we need to be more flexible with our vision?