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is short for "Keep It Simple, Stupid!" This may not be artfully phrased, but it is an important principle to keep in mind when negotiating a financing package. There are many factors that complicate a venture capital funding. Many of those complications are necessary to insure the best deal to the company. Others factors, such as registration requirements, are usually imposed by the investor. Nonetheless, management should always be wary of the tendency to overcomplicate matters. In general, the simpler a company’s relationship with its investor the better. Remember, management has to run the company after it gets funded. The less time management has to spend remembering the twists and complications of the company’s deal with its investor, the more time it will have for the productive work of making the company a success. See: Financing Agreements, Structure. |
