Ask HN: Seed funding from very hands-on relative

5 points by zach417 9 years ago | 2 comments

I'm starting a robotics company and currently raising seed funds (also applied to YC S2017). I'm building a robot that can do the entire laundry process autonomously.

A close relative had agreed to give me seed funding to start the company. However, when talking about the development of the product, they insisted that I write down every task that needs to get done so they know exactly where I am in the development process. In fact, they suggested that I only get 50% of the funding up front and will receive the rest of the funds pro rata as tasks are completed from this list.

We fruitlessly disagreed on this for the better part of an hour. I think planning is great, but betting the future of the company on the accuracy of the initial plan goes against most everything I know about startups.

I'm a noob, so I have no prior experience to help me here. Am I being unreasonable for not following through with the investment on these terms? How much project management materials do most angel investors require?

ductionist 9 years ago |

This is very unusual for any investor, especially angels. It is not, unfortunately, unusual for 'close' investors (friends, family members, etc.).

It sounds like your relative is considering investing money they can't afford to lose. This is going to be bad for both of you. Real angels make multiple investments and know that some will fail. They try to adjust for risk by doing better deals, not by micromanaging the founders they work with.

In my opinion, their behavior sounds like a huge red flag, and I wouldn't take the deal. You are not being unreasonable.

strongai 9 years ago |

I've never seen a plan that didn't have to be replanned. In all likelihood, your initial list of tasks is going to double or triple once you get into the zone. So I think this micro-level of attention is a huge red flag. If the money is important, and your relative is fundamentally a good person, why not suggest a number of high-level milestones rather than a multitude of tasks?