Venture Capitalists V. Founders: Battle At Mochi Media

Mochi Media, the fast growing Flash game advertising network and payments platform that we covered last week, is in the midst of an internal battle over the fate of the company.

The company is mulling over an acquisition offer that would give investors Accel Partners and Shasta Ventures their original investments of around $14 million back, but not much more. Founders and other employees wouldn't make much from the sale.

Normally this is an easy offer to turn down. The company is doing well and has "plenty" of money left in the bank, sources say. The founders obviously would want to continue to grow the business and hope for a good outcome.

But for some reason at least one investor, Ping Li from Accel, wants to close the deal and take his original investments off the table. He has been pressuring the founders and management team to accept the terms offered, multiple sources say.

That's left the founders frustrated, who apparently turned down an offer from Time Warner to acquire the company for $65 million or so a year ago. Li convinced the founders not to take that deal, sources say, and instead raise more money to go for a "home run." Now, a year later, Li wants to sell the company for a small fraction of that $65 million.