, but a general consensus is that getting funding will become a much more competitive endeavor for startups."The money is out there but it is harder to get and the equity take will be higher," one VC who was part of a special panel organized by Business Insider said last month. Startup founders about to pitch VCs should "be prepared to be hammered," the panelist said.
VCs, on the other hand, have had no choice but to play along. A startup founder choosing between multiple prospective VC investors will go with the one dangling the deal terms that are the most in her favor. Resisting the founder-friendy trend meant losing out on deals. Many VCs like early-stage firm Benchmark knew that and would market themselves as "founder friendly" to preempt the competition.
that in the wake of those companies' examples, investors were reevaluating founder-friendly deal terms. Although the institutional investors — commonly called limited partners, or LPs — aren't part of the day-to-day decision making at the VC firms they invest in, they can dictate in broad strokes what amount of risk they are comfortable assuming., many LPs sign off on big, risky bets hoping for a handsome payday. In a contracting economy, however, LPs can pull back.
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