The investor want access to the sandbox of my software and I have to agree

I've built some technology in the enterprise software space and I have taken it just short of where I can effectively bootstrap. A small number of beta users. I've invested 2 years of my life full time and my partner has worked on it part time for that period. The pitch went really well and the investors seemed "on the edge of their seat." This was my second meeting with them and it lasted 3 hours. At the end they asked me for sandbox access and I said yes but I haven't provided it yet, they also want to meet again in 2 weeks. I am concerned about providing sandbox access with no agreement in place, it opens the door to documenting every interaction in the system and replicating what I have built. Part of the reason I am seeking investment is my fear that a slow roll out opens the door to someone with lots of resources swooping in before I build momentum. I was hoping to get some advice. Should I provide access? If not how should I proceed?

Best Answer

I’m not going to go back and edit my original comment, however, it would be wise to approach your conversation with extreme caution.

And most certainly to not approach it with a hostile tone.

But ultimately, successful investing is not an emotional process. If you’re going to bring an investor on-board who is the type to let their emotions dictate their decision making, it’s at least a yellow-flag if not a red-flag.

Your investor seems like a pro to me, he straight up asked for sandbox access. And the way he cornered you into saying yes, to me this guy comes off as knowing exactly what he’s doing. Therefore, he should be able to understand where you’re coming from.

I also understand how easy it is in the moment to let someone with such perceived value walk all over you like that, but if you are able to hold your ground now, you’ll learn to better protect yourself as your business grows and involves all sorts of sharks trying to get a piece of your pie.

Evidently, you can already see that some people in the comments are already jokingly vying for a piece of your pie. As your pie becomes more valuable, you’ll have all sorts of these characters entering the picture. (Looking over at you u/graiz 😉)

There’s plentiful of investment capital in the world, even in this turbulent environment. Successful ideas however are the rare commodity.

Other points

Here’s how you can save yourself with the backtrack.

The next time you able to do so, communicate to the investor that you have sought counsel regarding your Intellectual Property and the nature of your current relationship with the investor.

Given where things stand at the moment, you are more than glad to offer them a guided tour of your platform and entertain any questions that the investor may have.

However, at this point in time, anything further or deeper than that is a liability concern for you. You have no protections in place to protect your property by giving the investor unsupervised access like that.

Also communicate to them that they must surely agree with you as if they had invested in your business, they would not take lightly if you did this type of access agreement with future investors you may bring on down the road.

If this person genuinely wants to invest in your platform and do business with you, they will understand and see where you are coming from and work with you to make a deal happen.

If you get any hint of disappointment or they respond negatively towards your counter-request, you can be rest assured that they must have had nefarious intentions and you just dodged a bullet.

Good luck!

I would treat this a lot like a prospect saying 'just give me a demo'.

Find out why they want access. It's perfectly reasonable to ask this so that you can make sure it's worthwhile for everyone.

If they 'just want to poke around' then you can suggest starting with a screen-share so that you can answer questions in real time, help them interpret things, etc.

If they have more specific questions, then it's a great way to help answer them.

If they have more nefarious ideas in mind, it will become clear very quickly. Just make sure you don't get sucked in and answer questions about how your 'secret sauce' works.

Question asked by

u/sinnerou

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