VC Bill Gurley Tells Startups to Beware of ‘Dirty’ Fundraising Terms

Bill Gurley, an influential venture capitalist who made an early bet on Uber Technologies Inc., sounded the alarm over what he described as a “fundamental sea-change in the investment community.”

In a 5,700-word essay posted on his blog, Gurley described how a tighter venture capital market and a dearth of initial public offerings is forcing some startups to accept toxic deal terms. The Benchmark general partner advised companies to make cuts to achieve profitability or go public. He also said entrepreneurs should swallow their pride and agree to sell shares at lower prices, a dreaded practice known in the industry as a down round.