Tell HN: Our VC turned the process of getting acquired into a nightmare
I run a startup I co-founded on the east coast, which is about as specific as I can be right now. The past three months has been some of the worst in my life but also provided some of the most valuable lessons learned. I thought I would use a throwaway account to blow of some steam and hopefully get some valuable feedback.

This is the situation: My startup is profitable with a team of 10 or so people and with a very happy and loyal customer base. But after five years in business I have come to accept that it has failed to yield any really high growth. This has forced us to take a step back and look at how we can reframe our business. We need to find a new product/market fit to kick in the next gear and get back on track to higher growth.

Three months ago, a favorable acquisition offer comes along. Part cash part equity, favorable terms. Because of our dwindling growth it is lousy timing valuation-wise. But right in this situation an acquisition might not be so bad because we know that we have a couple of years of very hard work ahead of us if we are going to turn the company around. Our VC has been supportive and great all along the way, although a huge red flag is that he has declined to be part of any new round of financing if that would happen. Discussing the offer with him, we agreed to go for a very rapid negotiation process and see the results.

But now when money is on the table, the VC turns very aggressively on us demanding much more of the deal value than stipulated by his share in the company. During the process he behaves very strangely, travels overseas and does not answer emails or calls for days and weeks on end which drags the negotiations out into months. The shareholder agreement allows him to block the deal if he's not happy with the terms, but so can us founders so the negotiations turn into a battle of wills.

In the teleconferences we do manage to set up, our VC uses whatever means he can to lean hard on us, including very verbal attacks on us personally. Sometimes he turns awkwardly friendly, doling out legal advice that on fact-checking turns out to be erroneous bordering on dangerous.

What happened in the end was that the acquisition offer was rescinded. The reasons cited for the offer to be withdrawn was that the timing was no longer there and that the buyer would not be happy to have our VC as shareholder because of his attitude.

So here we are. At this stage our relationship with our VC completely lies in ruins. I'm very ambivalent, the only thing really keeping me from quitting my company is the strong loyalty I feel towards my awesome team of founders and employees. If I'm going to develop a new product and perhaps bring in new funding, why do it in a company where I'm already diluted and the VC has proven to be a huge liability during financing and potential exits? On the other hand, if I start anew I will have to bootstrap completely from scratch instead of leveraging the great team and cashflow I already have.

If I do leave, the company will probably saunter along just fine without me. Maybe new management is just what it takes for it to skyrocket.

I would love to get an outside view on the above. Bash my head in if you think it is needed, that would be very refreshing. I have a really great lawyer at hand, so whatever legal advice you give me can do little harm because I run everything by him. What do you think?