We asked Bauer he if would elaborate on the details of what happened, maybe share some insights and lessons learned with the pure candor that he’s known for. Following is the second segment of our interview [read the first here] as part of the Entrepreneur 2 Entrepreneur series:
Why not keep going, you already had half the money?
The investor that didn’t want to continue had a preferred position and thus making a new investment by anyone very unlikely. This includes my willing investor as his terms were for the preference to be removed prior to his investment. When you raise money it’s done along a curve. Depending on a large number of factors that curve is either favorable or not to new investors, existing investors and founders. We were in that unique place where it’s wasn’t favorable for anyone.