It’s no secret that, thanks to the success of Y Combinator and rise of the incubator, there’s been a shift in the balance of power between entrepreneurs and venture capitalists. It’s a good thing — before recently, entrepreneurs could easily be taken advantage of by predatory VCs on deal terms. Term sheets have long been a dark art with no standardization.

With that shift, though, the pendulum has swung in the wrong direction, said Naval Ravikant, founder of AngelList, at PandoMonthly San Francisco tonight. Some entreprenuers push it too far, as evidenced by the emergence of things like uncapped notes, he said.

Which is why he doesn’t believe founders should push to raise as much money as they can at the best valuation they can. “Money has karma too. And if you treat it badly, it will treat you badly,” Ravikant said. “You have to be balanced about it. If you have a strong hand, you can have a strong outcome.”

It’s particularly important in Silicon Valley, where business relationships are meant to last a lifetime. “People who are over-optimizing for the moment — I’m wary of them,” he said. “It’s signaling they’re not a long term player.”

He’s noticed it more recently, because Silicon Valley has become a “magnet town” again for outsiders wanting to, essentially, win the lottery and leave. But the Valley is what it is because of its Prisoner’s Dilemma. There’s a benefit to cooperating and playing nice, because you know you’ll be playing with the same people again and again.

“When a new person comes in to win and leave, the temptation is to cheat,” he said. When he sees that mentality in a founder, he walks away. “The fact that they were fighting for this tiny, tiny little piece shows me that they’re over-reaching and going for too much right now,” he said. “All returns on life come from compound interest.”

[Watch the Livestream for PandoMonthly SF with Naval Ravikant here.]