After eight months of fundraising, Rakhesh got his only term sheet — and his lawyer said "I don't think this is very good, and because you don't have another one, you have no leverage." He refused it: "I felt like I would actually rather not start the company than take that term sheet and potentially have this kind of dynamic going forward."
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The emotional whiplash made it harder: he'd just passed the investment committee and "I remember just being so elated at that point." Walking away from the only offer on the table after eight months of pitching four or five times a week was "a bad day" — "I thought, why is this ever gonna happen?"
But the refusal was vindicated. He kept pitching, and in November met a fund that moved from first meeting on the 13th to a term sheet by the 29th — 16 days — in a meeting where the investors were so excited they started pitching his own company back to him. The principle: a bad term sheet isn't just bad economics, it's a bad dynamic you're locking in for the life of the company — and that can be worse than not starting at all.