I was reminded of one pet peeve I had from my past in venture capital when reading about Spark's newest development. I highly recommend that you read the article about these guys picking up their own legal fees. I too felt that it was always quite ridiculous to charge legal fees of a VC fund back to the portfolio company after you financed them. I hated this almost as much as VC's who used to charge closing fees on top of this. That was an absolute crime if you really think about how it was the VC fund taking their investor's money and funneling it directly into their own pockets via the management company.
What I want you to watch out for is the dubious term "skin in the game" or some form of it. Unfortunately, many VC's will throw this at you as risk prevention. They will tell you that they want you to have "skin in the game" and expect you to have your own money at play when investing. It keeps you from bailing out too early and leaving them holding the remains. This is where this gets tricky. I too think it makes sense that you initially bootstrap your business and only go to VC's once you need growth capital. If you can't even scrape the first 10k together then good luck ever having any success when it comes to sales. Nevertheless, I don't believe a young entrepreneur who may not even have 5k to his name should be forced to go out and try to get 25k or even 50k together to "participate" in a round so that he has "skin in the game". He tends to have enough at play if he is only Ramen profitable. Older founders who have 5 to 10 years prior experience should obviously be able to put in a bit more of their own capital but again....if they're expected to be putting up 100k or 200k without having had an exit already, it's questionable.
I've seen this practice in the past and didn't feel right about it at all. What it does is put the entrepreneur in a very precarious position of being completely screwed if things fail. Yes, he has "skin in the game" but if the company fails (which may not always be his fault) he may be ruined financially for quite some time. This doesn't even take into consideration the additional problems of raising money from friends and family that rear their ugly head when things go south. It also leads to extremely streneuous decision making. If at all times the founder has to worry about going broke, he may be forced to take the less risky road which obviously doesn't deliver the returns expected.
What can you do about this when raising capital? Well, avoid the VC's who want you to be in a position where you are completely ruined if things go south. The VC's have skin in the game by being investors in their funds but one misstep doesn't cost them all their net worth. If you are asked to put yourself in a positon where you are ruined by a couple things going wrong, question the ethics of your VC. Ask yourself if you really are getting into a partnership or are just at the wrong end of a bad bet!