Just when you thought it was safe to go back in the water … VCs are back
The Venture Capital Boys Are Back … arrogant, snide and generally unpleasant to deal with. We have dealt with two lots of them recently … or rather we have tried to … then haven’t and won’t.
First they sign STC’s reasonable agreement …. then they tear it up and want their own special terms.
These terms of theirs which they claim are ’standard’ – they aren’t in this market! – would leave our tender clients with no competitive offers, no representation and no advice from their agents … and at the mercy of their dubious tricks.
One even said ”what did that matter to us so long as we got paid” ?!!
If you deal direct with a VC, here’s what you can expect to happen – because it has happened every time we have dealt with venture capital groups in the past ….
First you get a meaty offer. To accept this you have to sign an exclusivity deal with them.
Then they ask for an extensive ‘due diligence’ … which is a fancy way of saying they want to ask all the questions again and again in greater and greater detail so that they have an excuse to reduce their offer. And whilst you are spending a lot of time and money on this, of course all your other buyers will have melted away.
Deadlines for completion will come and go while more questions are asked … and you will not be able to go back to your agent and ask who else is out there under their terms …
And eventually – you will rub your eyes at this one – they will ask for a 20% reduction in the price on the day of completion.
In one instance, due diligence cost a client £70,000 over time … the offer was reduced by 20% … fortunately they walked out. We sold the school for £1,000,000 more than the lower offer in a short space of time.
If you are approached by a VC, tell us in confidence. We shall find you a better buyer if you want one!
STC always gets competitive offers and our advice is always free and liberal until you have the right offer – and the right people – to proceed.