Does Venture Capital Reimburse Earlier Worker Investments?
Posted by admin on 16 Sep 2009 12:00 am. Filed under Small Business.
Rachel E
My company of 6 consultants is looking at getting $4 million from a VC firm. We have been working for free for the past year, investing our own time and money to make the company a success. Will we be able to use any of the VC money to reimburse ourselves for the work that we already performed and did not get paid for?
My company of 6 consultants is looking at getting $4 million from a VC firm. We have been working for free for the past year, investing our own time and money to make the company a success. Will we be able to use any of the VC money to reimburse ourselves for the work that we already performed and did not get paid for?
2 Comments to “Does Venture Capital Reimburse Earlier Worker Investments?”
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On September 18th, 2009 at 12:06 pm
That depends on the agreement with the VC. Most VC’s want to see their money go toward further expansion of the firm and other things that will contribute to success going forward.
On September 18th, 2009 at 8:48 pm
In general, the answer is no. If they were really hot on your company and there are several VCs bidding you might get such a special deal. But, in today’s financing environment, forget about it. These days, its tough for even decent ventures to get funding at all. If you have been talking to VCs you should know that valuations are at a low and they are being very selective. It might not hurt to ask but I wouldn’t make it a requirement unless you have more than one firm offering you money.