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Accelerator wants to sell the percentage they funded at the beginning

I am asking the question here because I can’t find a similar case talking to colleagues. We got into an accelerator and receivedĀ funding in exchange forĀ a % of equity. Since then, we have been bootstrapping and growing organically little by little. Now, they want to sell me the percentage they funded, at a slightly lower rate, but I am not sure this is really interesting.

Since the end of the acceleration process, they didn’t help at allĀ and don’t have intentions to help me in the future.

Any thoughts?

    • Hi, thanks for your comment. As far as i know, they don’t. From 15 startups, 11 are closed, and 4 are still alive but with no major exit. I don’t know if they are afraid that I close too.

      Thanks!

      Reply

  • It’s very simple really. Do you feel your startup is worth more now compared to when they gave you the funding? If so take the deal since they are willing to take a haircut and you should be able to find a willing buyer for their shares.

    If.not then buying back the equity is wasting your money that you can better put to good use elsewhere

    Reply

  • Are you better off spending the cash you have buying back shares or putting it back into your business to fuel growth? If they are willing to take a haircut now they will take one in the future.

    If they have a board seat you should find a way to get that seat back without buying back shares. It doesn’t they have any intrest in your company anyways.

    Reply

  • Why would you even consider buying back the shares? If your business is doing great the accelerator wouldn’t try to dump their shares. If your business isn’t doing so great then you need the money much more than you need the shares. So it’s losing proposition for you no matter what. You already pointed out that the accelerator was kind of useless, so they’re not selling you your shares back out of kindness.

    Reply

  • Hi,

    Thanks for answers, it’s food for thought! Well, we are growing, but they want a quicker growth. For now, I would say this money would be useful to the business but it won’t be life changing…

    Any additional thought?

    Thanks!

    Reply

  • Hi,

    for sure you can’t find it around, is a pretty unique situation. Accelerators normally do the inverse. It depends a lot on your Agreement for sure, but it’s pretty improbable to have a burden as a resource and feel good, especially for a long run. On that side, my experience strongly suggests to runaway in any case.

    I’d like to have a realistic internal metric and value off your minimum share value with a complete 2 quarters projection/growth, and let them wait.

    If isn’t life changing, you can even start to understand if somebody else can be interested in a cash drop or maybe you just want to reserve yourself and team more freedom.

    Anyway, I feel it’s better to do NOT decide now, guy upstairs is right, now is a losing prop both ways.

    Focus on your choice!

    Reply

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