Should founders take the highest-priced term sheet, or discount price for investor quality?

Eric Paley · Sep 20, 2023

A meaningful number of founders will forgo price optimization to work with an investor they actually want, rather than take the highest term sheet or a party round

Like graduates who self-select away from high-salary prestige brands, some people quickly realize price and brand aren't the optimization equation they care about

Scope: acknowledges many founders don't want to hear this

40:37 20VC Roundtable: Is the VC Model Broken? The Biggest Disconnect Ever Between TVPI & DPI, Why Market Size is Dangerous, Why "Go Fast" is Terrible Advice, The Dangers of Raising Large Rounds at High Prices & Why Next Year Will See the Biggest Hiring Spree i

Mike Maples · Sep 20, 2023

When founders accept a lower price it is not because they believe they might fail to raise next round, but because they value working with a specific investor enough to take more dilution

41:45 20VC Roundtable: Is the VC Model Broken? The Biggest Disconnect Ever Between TVPI & DPI, Why Market Size is Dangerous, Why "Go Fast" is Terrible Advice, The Dangers of Raising Large Rounds at High Prices & Why Next Year Will See the Biggest Hiring Spree i

Craig Courtemanche · Dec 4, 2023

In choosing investors, the brand of the venture firm matters less than the individual partner — founders should pick partners who share their values and will be deeply engaged rather than just deploying capital

He got to know Will Griffith and Brian Weinstein personally over a long period; the two investors he chose are still on the board and fully behind the mission

20:10 20VC: From Construction Worker to Billionaire CEO; The 21-Year Epic Journey of Procore to an $8.6BN Company, Advice from Tobi at Shopify on Being a Great CEO & Why The Idea of "Becoming an Entrepreneur" is BS with Tooey Courtemanche

Jason Citron · Nov 25, 2024

Founders should not always take the highest price in a round

He turned down a higher-valuation Series A offer because he wanted to work with Mitch Lasky

38:10 20VC: Discord's Jason Citron on Why Everything We are Taught About Hiring & Management is BS | Do Richer Founders & Gamer Founders Make Better Founders? | Never Before Told Moments Behind Scaling to 200M Users

Jason Citron · Nov 25, 2024

Choosing an investor is not really about the firm, it's about the individual partner

Having worked with many investors over the years, the value came from the specific person — Mitch — not the brand

Scope: he hasn't worked with Benchmark's other partners so can't judge them

38:20 20VC: Discord's Jason Citron on Why Everything We are Taught About Hiring & Management is BS | Do Richer Founders & Gamer Founders Make Better Founders? | Never Before Told Moments Behind Scaling to 200M Users

Eléonore Crespo · May 9, 2025

The biggest early fundraising mistake is choosing a firm for its brand rather than evaluating the individual partner, because you get one person on your board, not a brand.

The individual is who sits on your board, and it matters enormously who that is — brand quality doesn't transfer to the person.

Scope: matters much less for investors who take no board seat

38:11 20VC: Four Traits of the Most Successful Founders | How to Hunt and Close Talent Like a Pro and Where All Founders Go Wrong | Lessons Raising $397M From the Best Investors in the World with Eléonore Crespo @ Pigment

Immad Akhund · May 12, 2025

The single most important thing a founder chooses when raising is the individual partner, not the firm's platform services

You'll be talking to that partner roughly monthly for years — Alex at Andreessen since 2017 — so it matters enormously whether they're smart and enjoyable to riff with; much of Andreessen's platform value-add wasn't super useful to Mercury

Scope: value of platform services depends on company type

9:01 20VC Exclusive: Mercury Founder Launches First $26M Fund | Why Founders Should Take the Highest Price | Why Serial Entrepreneurs are Better | Why AI Is So Overhyped | The Future of Venture Capital with Immad Akhund

Max Junestrand · Aug 15, 2025

Founders should choose their lead investor on the individual partner — chemistry, long-term commitment, and what unintroduced references say about their behaviour in hard times

You're going to do this for a really long time, so make decisions you'll still be happy with a decade out; and you can only date so many funds and partners

32:45 20VC: 15 Term Sheets in 7 Days and Choosing Benchmark | Harvey vs Legora: Who Wins Legal and How to Play When You Have $600M Less Funding | Are AI Models Plateauing Today | Building a 9-9-6 Culture From Stockholm with Max Junestrand

Winston Weinberg · Jan 19, 2026

Founders should optimize for investor quality and trust over headline valuation, even when a higher price is available

He chose investors he trusted and personally wanted to work with over the higher valuations he could have gotten in almost every round

Scope: based on his own fundraising experience at Harvey

12:51 20VC: How Model Performance is Plateauing | Two Key Rules for Effective Deal-Making | Company Building Lessons from Keith Rabois, Brian Halligan and Pat Grady | Why Enterprise AI Adoption is Years Off with Harvey CEO Winston Weinberg

Max Junestrand · Jan 26, 2026

Choosing an investor should be driven by the individual partner rather than the firm's brand or the price offered

He had a competitive preemptive term sheet at a much higher price and Benchmark was the lowest priced seed offer, but after meeting ~80 partners nobody knew his space better than Chetan, who has taken three companies public — which is what Max wants to do

Scope: based on his own seed process

54:50 20VC: From Only OpenAI to Die-Hard Anthropic: The Downfall of OpenAI in Enterprise | Harvey vs Legora: Legal AI is a Winner Take All | $7M ARR in a Single Day and Raising $200M Across 3 Rounds with No Deck with Max Junestrand, CEO @ Legora

Paul Erlanger · Jun 27, 2026

Founders should pick the individual investor they trust most rather than the highest-tier firm or the highest price

This is the person you call every week about every decision, so trust matters more than brand; the right help is company-building experience or trust in your intuition, not product advice, since founders must build the product themselves

21:52 20VC: How We Got Fred Wilson, Benchmark and Index to Invest $94M | Why Robinhood's Strategy is Wrong | Why 1-1s are BS and What Every Founder Gets Wrong About Equity | Why Taste Beats AI But How AI Kills Org Charts with Paul Erlanger, CEO @ fomo

Severin Hacker · May 19, 2025

Founders should always try to raise from the best Tier 1 VCs even if the terms are slightly worse

The signaling value of a top-tier investor outweighs slightly worse terms

Scope: terms only 'slightly' worse

0:00 20VC: Duolingo Co-Founder on Why $3M is Harder than $100M to Raise | Why You Should Always Take Tier 1 VCs Even at Worse Terms | Why Europe Can't Win Unless the US Screws Up | How AI Impacts the Future of Work and Education with Severin Hacker

Severin Hacker · May 19, 2025

Founders should always raise from the best tier-1 VCs, even if the terms are slightly worse.

The signaling value is enormous: because Union Square with its track record invested, every other investor took a serious look, making every subsequent round far easier.

Scope: Applies when the terms are only slightly worse

63:24 20VC: Duolingo Co-Founder on Why $3M is Harder than $100M to Raise | Why You Should Always Take Tier 1 VCs Even at Worse Terms | Why Europe Can't Win Unless the US Screws Up | How AI Impacts the Future of Work and Education with Severin Hacker

Jack Zhang · May 27, 2025

Founders should not always take the highest price when fundraising; they should prioritise whichever investor gives the most leverage on brand, hiring and commercial opportunities

78:39 20VC: The Most Insane Story in Startups: Airwallex: The Angel That Turned $1M into $1BN | The Fund That Pulled a Term Sheet & Lost $1BN | Rejecting Stripe's $1.2BN Offer | Scaling to $1BN in Revenue & 100% YoY Growth for 8 Years with Jack Zhang

Jack Zhang · May 27, 2025

Venture firm brand makes a material difference to a company, but only for roughly the top five firms — having Sequoia is a huge advantage

Scope: only the top five firms

78:53 20VC: The Most Insane Story in Startups: Airwallex: The Angel That Turned $1M into $1BN | The Fund That Pulled a Term Sheet & Lost $1BN | Rejecting Stripe's $1.2BN Offer | Scaling to $1BN in Revenue & 100% YoY Growth for 8 Years with Jack Zhang

Max Junestrand · Aug 15, 2025

He does not wish he had raised at 10% dilution instead, because the quality of your earliest investor matters more than the extra dilution

He wouldn't have gotten Benchmark at 10% dilution, and for a first-time founder the wrong VC in your corner can get you off track

Scope: especially for first-time founders

31:49 20VC: 15 Term Sheets in 7 Days and Choosing Benchmark | Harvey vs Legora: Who Wins Legal and How to Play When You Have $600M Less Funding | Are AI Models Plateauing Today | Building a 9-9-6 Culture From Stockholm with Max Junestrand

Harry Stebbings · Jun 20, 2026

There is valid generic fundraising advice: tier-one investors are worth a discount because they unwaveringly help you get the next round

Brand-name backing reliably pulls in the following round

34:49 20VC: Why Remote Work is White Collar Fraud | Why Revenge and Patriotism are the Best Founder Traits | Two Questions Every Founder Needs to Ask | The Wild Story of Raising $1BN from Masa Son in an Hour Long Meeting with Ryan Peterson, Founder @ Flexport

Katherine Boyle · Oct 1, 2020

Founders should optimize their investor choice for mission alignment and courage rather than brand or round dynamics, regardless of whether that person sits at a seed or multi-stage firm

You are putting that person on your board for a very long time, and optimizing for brand or round dynamics can be harmful

23:24 20VC: What Is Founder Narrative Fit and How to Detect and Invest In It, How To Avoid Consensus Thinking When Investing, Price Sensititivity; When To Pay Up vs Stay Disciplined & From New York Times To General Catalyst; Why Venture and Journalism are Not S

Katherine Boyle · Oct 1, 2020

Founders underweight personality, courage and mission alignment relative to price and round dynamics when choosing investors

These ten-year journeys are hard to predict, so what you want is a board member who will have your back if anything goes wrong

Scope: concedes Harry's price and signaling concerns are valid things to weigh

25:44 20VC: What Is Founder Narrative Fit and How to Detect and Invest In It, How To Avoid Consensus Thinking When Investing, Price Sensititivity; When To Pay Up vs Stay Disciplined & From New York Times To General Catalyst; Why Venture and Journalism are Not S

Katherine Boyle · Oct 1, 2020

The biggest mistake founders make when raising is optimizing for brand and price and short-term effects instead of finding mission-aligned investors

Mission-aligned investors will have your back and show courage when things get tough

40:54 20VC: What Is Founder Narrative Fit and How to Detect and Invest In It, How To Avoid Consensus Thinking When Investing, Price Sensititivity; When To Pay Up vs Stay Disciplined & From New York Times To General Catalyst; Why Venture and Journalism are Not S

Ophelia Brown · Mar 17, 2023

Of price, round size and investor brand, founders should prioritise price and round size and let brand go

With so many firms in the market, brand means less than the value delivered; the old logic that brand helps you hire and generate publicity doesn't hold because engineers join for mission, product and team, and brand-name investors have done 40 other deals that year

Scope: informed by Blossom's own experience competing as an unproven firm against brand firms

32:38 20VC: Why Growth Investors Ruined the Venture Market, Why Marketing in Venture Has No Substance, Why Follow-On Investing Can Damage Returns and The Mistakes VCs Made in the Last 18 Months with Ophelia Brown, Founder @ Blossom Capital

Scott Farquhar · Oct 9, 2023

The right way to run a competitive round is to pre-screen so that only investors you would genuinely want on your board are invited, and then commit to choosing the highest bidder

Pre-screening for people you'd be happy to have on the board and grow with means price can safely be the deciding factor

15:21 20VC: Atlassian Co-Founder Scott Farquhar on The Biggest Lessons Scaling Atlassian to $50BN Market Cap; The Four Roles of the CEO, The Funding Round That Net Accel $6BN, The Regrets of Omission and Commission & The Honeymoon Cut Short

Ryan Petersen · Jun 20, 2026

The rule that you should never take the highest price is wrong, and generic fundraising advice is dangerous because price and investor quality can be uncorrelated

Sometimes the best brand-name investor pays more than the second best, and any given founder knows their own situation better than an outside advisor does

Scope: he personally tended to take the highest price

34:13 20VC: Why Remote Work is White Collar Fraud | Why Revenge and Patriotism are the Best Founder Traits | Two Questions Every Founder Needs to Ask | The Wild Story of Raising $1BN from Masa Son in an Hour Long Meeting with Ryan Peterson, Founder @ Flexport

Ed Sim · Oct 27, 2023 · hedged

The era of founders being obsessed with getting the highest possible price is largely over; smarter founders now optimize for a fair-to-above-average price and the right long-term partner

They don't want excess dilution from too much capital and they see what's happening in the exit markets

Scope: for the most part; applies to the best/smarter founders

32:55 20VC: The Three Types of Seed Round Today, Why Seed Has Never Been More Competitive, Why Pricing Has Never Been Higher, Why Boards at Pre-Seed Can Be Helpful & How Too Much Cash Too Soon Can Harm Companies with Ed Sim, Founder @ Boldstart

Chris Dixon · Mar 27, 2024

Founders should weight who their investors are more heavily than getting the highest price and least dilution

Choosing investors is a ten-plus-year, basically irreversible relationship, and building a company means assembling excellence around you as well as inside the company

Scope: dilution and price still matter and shouldn't be ignored; acknowledges he may be talking in his own book

41:30 20VC: a16z's Chris Dixon on Who Will Win the Next Generation of Venture, The Two Ways to Make Great Venture Investments and Find the Best Entrepreneurs & Why AI Will Strengthen the Position of the Incumbents Moving Forward

Mamoon Hamid · Oct 21, 2024

Founders should not aim to raise as much money as possible at the highest price at seed and Series A; what matters is the people they surround themselves with

At that stage the quality of your investor partners matters more than price

Scope: seed and Series A specifically

38:31 20VC: Kleiner Perkins' Mamoon Hamid on Investing Lessons from Leading Rounds in Figma, Slack and Rippling | Lessons Building a Generational Defining Firm with Kleiner Perkins | AI: Where Value Accrues, Startups vs Incumbents & Scaling Laws

Dan Siroker · May 15, 2024

The best investor for your company is one on the rising arc of their career — before their first IPO — rather than an established legend

For an already-successful investor you're unlikely to be the difference in their career, whereas a rising investor is aligned in their bones and their pocketbook on you reaching the pinnacle with them; like taking an NBA player in their prime rather than on the way out

Scope: not meant as ageism; no knock on the successful investors he worked with

48:18 20VC: Fundraising Wisdom that is Total BS; Dilution, Meeting Associates, Taking the Highest Price, Always Be Raising | Why Second Time Founders Are More Investable & Why Not To Hire People Out of College with Dan Siroker, CEO @ Limitless

Mark Goldberg · Oct 25, 2024

Hunger and hustle from an unproven investor is a legitimate competitive advantage against brand-name firms, and having that as a distinct product choice is good for founders

When he had no brand or portfolio he pitched that the founder's success mattered more to him because his job depended on it; it lost some deals and won others because they are different products

Scope: drawn from his own early experience at Index a decade ago

10:57 20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry

Harry Stebbings · Dec 15, 2025

At the growth stage, scale and brand are the decisive factors in choosing a firm

57:44 Stage decides what to optimize firm scale and brand at growth

Sarah Guo · Apr 28, 2023

Founders should choose investors on both tactical grounds (who moves the needle in the next 18 months) and long-term grounds (who they trust and want around)

Different founders will rationally make different decisions, but they need to understand firm incentives first

27:28 Founders should weigh both tactical fit and long term trust given firm incentives

Phin Barnes · Oct 2, 2023

Deciding not to chase the best founders or hottest opportunities because you can't compete on price is self-hamstringing; you have to test your product in competition with the largest funds.

If you really believe in your product you must test it against the best; there are founders who recognize the extra dilution is something they can make up for with progress, and the most experienced ones with the clearest vision make that choice.

28:45 Smaller funds must still compete for the best founders rather than avoid price competition

Michael Eisenberg · Feb 8, 2021

If a founder wants your money because of the price you're offering, you shouldn't do the deal

Price-driven selection reveals how the founder thinks about the world; you want founders who optimize for the help and network an investor brings, since if it works out everyone gets paid anyway

26:59 Avoid founders who select investors purely on price since it reveals poor judgment

Jack Zhang · May 27, 2025

The power of top venture brands is a downside as well as an upside, because it pushes founders to choose the brand over the individual people they'd most want to work with

Ideally an investor is also a friend you get along with; brand pressure overrides that criterion

79:02 Brand pressure overrides personal investor fit a hidden downside

Immad Akhund · May 12, 2025

At the later-stage level price isn't the deciding factor, because good firms will match or beat whatever the highest offer is

He would have taken Sequoia at a somewhat lower price; what matters is a fair valuation and the best long-term-focused firm, and it isn't really about the money for either side

12:06 At later stage good firms match the highest price so price doesnt differentiate

David Tisch · Feb 27, 2023

If forced to rank, 'who you raise from' matters most, then how much money, and price last — founders should compromise on price if they can get the other two.

The gap between your top choice and fifth choice investor is a fine compromise but top versus hundredth isn't; and you need enough money to make real progress, hire, and build.

25:01 Rank who you raise from first then amount then price last

Jason Lemkin · Sep 20, 2023 · hedged

A great founder will accept roughly a 20% lower term sheet to work with an investor they really want, but a discount beyond 20% is probably mythical

42:12 Roughly twenty percent discount is the practical ceiling for choosing investor fit over price

Tom Hulme · May 8, 2024

A founder is only as good or as bad as their options, so the job to be done is to create options and then choose on the whole picture rather than selecting on price alone

Price and structure trade off against each other — 'if you tell me the price, I'll tell you the structure' — so optimizing on the headline valuation is a vanity metric

11:17 Price and deal structure trade off so optimize on full picture not headline price

Johannes Reck · Jun 23, 2025

Founders should run a competitive process rather than give a discount, except for a founding GP of the firm who will still be there years later — for that, a discount is worth taking

Founding partners never leave their firms, so they stay with you long-term; Alex Finkelstein at Spark and Fargo Mullen at Highland Europe are both firm cofounders and are still with those firms today

54:41 Discount only for founding gps who will stay long term

Victor Lazarte · Apr 14, 2025

The best founders optimize for getting their initial conditions right and the smartest people around the table, rather than for terms or capital

Initial conditions have an outsized effect on what the company can ultimately do

59:54 Initial conditions and caliber of people matter more than terms or capital

Jake Saper · Mar 10, 2025

How an investor shows up as a board member is a legitimate and decisive basis for founders choosing between competitive term sheets

Assembled's founders ran a mock board meeting at 11pm to test candidates and chose Emergence on that performance; he is passionate about board service being done right

79:02 Board meeting performance decides between competing term sheets