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ETHICS BETWEEN INVESTORS, VC's & 4IíS CNMI, LLC

This is a list of 20 ideals that should be adopted as a code of conduct for both sides. This is from Gil Dibner, The Foundry Group and associated with the University of Colorado Law School, ďVC 360.Ē


We, 4i's-CNMI, agree with most all of what these ideals state, however still find a need for NDA's in the market place - sorry. But the business or investor who is so trusting in his new ventures & fresh partnerships, is also a business or investor who is no longer in business!

A reader of this list, said it well: "Not sure that "I will not sign a NDA, but will act as if a reasonable one is in place" is simple or clear. Maybe you mean "I will try to keep your information confidential. But in my business that's really hard so I can't promise that I will always remember where I got my information"? Is this true, after all, or is it true? Enjoy the list-


1. I will do no harm. Should be ďduh,Ē but being on boards for the last 15 years proves this isnít as simple as it sounds.

2. I will respect your time. CEO / Entrepreneur time is simply more valuable than my time. I donít make the companies successful Ė yíall do.

3. I will not ask for material I donít need. And I wish Gil would have added ďAnd I will read and be responsible for understanding all materials that you send me.Ē I canít stand board meetings where a CEO is having to go through the presentation for the benefit of lazy board members.

4. I will not string you along. It always surprises me how many people thank me for a quick NO. Itís the humane thing to do.

5. I will let you know about competitors in our portfolio. Done.

6. I will be transparent about any conflicts of interest between and entrepreneur and myself. Iíd argue that this should be even broader. Just be transparent in general! An entrepreneur should never wonder what a VC is thinking. Letís just be open and keep filters to a minimum and clear honesty to a maximum.

7. I will not sign a NDA, but will act as if a reasonable one is in place. Simple. But also know that if you ask me for a NDA Iíll know you havenít done much homework and you arenít starting off on the right foot.

8. I will not share your slide deck unless you give me permission. With my partners, yes. With others, no.

9. I will not speak to your customers without permission. This is horrible behavior in our industry that must stop.

10. I will educate before I negotiate. Iíve always loved doing this and this is what led to Brad and I writing our book Venture Deals Ė Be Smarter Than Your Lawyer and Venture Capitalist.

11. I will be honest about what standard terms are. I agree with the sentiment, but as a former lawyer, I hate the idea of negotiating over the term ďstandard.Ē Iíd prefer to just put our term sheet out on the web and give the same deal every time as weíve done at Foundry Group.

12. I will not issue a term sheet unless my firm has made a firm decision to invest. This is perhaps the worst behavior in our ecosystem today. I see it more often with late stage firms than early firms, but it is present at all stages. Once a firm pulls this trick on a company I will never work with them again. Ever.

13. I will reflect the term sheet in the final legals. A deal is a deal. íNuff said.

14. I will not seek an unreasonable equity stake in your business. I think this is an important one. Everyone must feel like they have proper ďskin in the game.Ē This seems like a simple concept, but often you find people fighting over things that shouldnít matter. Assume the company will be a huge success and donít over optimize around the edges.

15. I will avoid surprises. I think that if VCs and entrepreneurs have transparent relations, as in 6 above, then this just follows.

16. I will act in the best interests of the company at all times. Itís not only the law, but a good idea too.

17. I promise to try not to look at my phone in meetings. This is a hard one, but an important one. Iím not perfect, but Iím trying. Frankly, I find myself looking at my phone when the meeting gets bogged down, usually by a board member who didnít come prepared.

18. I will respond to you promptly, especially if we have an investment in your company. This should be table stakes to a VC, but it isnít. There are always particular emergencies and situations which will make this difficult, but it is really important for an entrepreneur to know they always have someone to turn to. After all, being CEO is a lonely job.

19. I will not collude with other VCs to harm your company. I find it reprehensible when VCs collude to either drive down valuation / terms prior to a financing, or when the company is in dire straights collude to take over the company on the cheap. There are plenty of other situations, too. This one may have the greatest ďsubject to interpretationĒ issue to it, but Iíve seen this line crossed at times and it disgusts me.

20. I will answer all well-tailored emails. If I am sent a well-crafted email, I will answer it. I promise. Whether or not I know you or not, youíll get a response. This doesnít mean that I will answer spam, emails created from mail merges, emails with so many grammatical and spelling mistakes that I canít read or emails that are clearly from someone who has done no research into what Foundry Group invests in. But if you at least try, youíll get a response from me.

Thatís an even twenty and Iím sure we could add a few more, but this would be my Twenty Commandments of VC, or as Gil put it a VC Code of Conduct.