Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist is a must-have resource for Any aspiring entrepreneur, venture capitalist, or lawyer involved in VC deals as well as students and instructors in related areas of study.
I remember the first week of my career as a VC. I was 25 years old, it was 1986, and I had just landed a summer job in a venture capital firm. I was working for three experienced venture capitalists in a small firm called Euclid Partners, where I ended up spending the first 10 years of my VC career. One of those three partners, Bliss McCrum, poked his head into my office (yes, I had an office in Rockefeller Center at age 25) and said to me, Can you model out a financing for XYZ Company at $9 million pre-money, raising $3 million, with an unissued option pool of 10%? and then went back to the big office in the rear he shared with the other founding partner, Milton Pappas.
As each new generation of entrepreneurs emerges, there is a renewed interest in how venture capital deals come together. We encounter many of these first-time entrepreneurs through our activities as venture capitalists at our firm, Foundry Group (www.foundrygroup.com), as well as our involvement in Techstars (www.techstars.com). We were regularly reminded that there was no definitive guide to venture capital deals and decided to create one.
When we first conceived this book, we planned to aim it at first-time entrepreneurs. We both have a long history of funding and working with first-time entrepreneurs and often learn more from them than they learn from us. Through our involvement in Techstars, we have heard a wide range of questions about financings and venture capital from first-time entrepreneurs. We have tried to do a comprehensive job of addressing those questions in this book.
We were once inexperienced investors. We learned mostly by paying attention to more experienced investors, as well as actively engaging in deals. We hope this book becomes another tool in the tool chest for any aspiring investor, whether an angel investor or venture capitalist.
While we have aimed this book at entrepreneurs and investors, we hope that even lawyers will benefit from us putting these thoughts down in one place. At the minimum, we hope they recommend the book to their less experienced colleagues so that we can all speak a similar language around venture deals.
We begin with a brief history of the venture capital term sheet and a discussion of the different parties who participate in venture capital transactions. Following this is a section on preparing for fundraising and choosing the right lawyer.
We then discuss how to raise money from a venture capitalist, including determining how much money an entrepreneur should raise. This includes a section on how to properly prepare your company for fundraising and discusses the materials you will need before hitting the fundraising trail. As part of this, we explore the process that many venture capitalists follow to decide which companies to fund.
The venture capitalist (VC) is the next character in the term sheet play. VCs come in many shapes, sizes, and experience levels. While most (but not all) profess to be entrepreneur friendly, many fall far short of their aspirations and marketing campaigns. The first sign of this often appears during the term sheet negotiation.
An excellent book for entrepreneurs, venture capitalists, and lawyers to acquire an in-depth understanding of the venture capital deal structure and strategies. This work presents a detailed view of what it takes to be a successful entrepreneur and decodes the venture capital term sheet for lay readers and professionals. In addition, the authors discuss useful strategies for entrepreneurs seeking venture capital, things that might go right or wrong along the way, and what it means for those involved. Another interesting aspect is how the individual roles of people typically involved in a venture capital deal are defined, bringing an exceptional level of clarity to work. An absorbing read for anyone interested in understanding nuances of how venture capital deals are made and unmade.
This book offers a balanced perspective of venture capital and how entrepreneurs should strategize to attract the desired funding while avoiding potential mistakes committed by startups. Not focused on a specific role, this work affords a more decentralized view of how things work out for entrepreneurs and venture capitalists, depending on how a deal is structured. A recommended read for students, professionals, entrepreneurs, and venture capitalists.
This venture capital book offers exceptional practical value to the reader with a stepwise introduction to the underlying theoretical concepts related to venture capital and how to successfully apply them. Interviews of leading experts in the field make it an invaluable guide with useful insights and resources for finance professionals, venture capitalists, and entrepreneurs. The companion website brings added value to the work. A commendable work on venture capital covering every aspect in a well-structured manner along with expert insights. 2b1af7f3a8