Venture Deals reader â doc Be Smarter Than Your Lawyer and Venture Capitalist Free ´ eyltransferservices

eBook Venture Deals

Venture Deals reader â doc Be Smarter Than Your Lawyer and Venture Capitalist Free ´ eyltransferservices Ó [KINDLE] ❃ Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist Author Brad Feld – Eyltransferservices.co.uk A full revised edition oY continue to share their experiences in this field with you Engaging and informative this reliable resource skillfully outlines the essential elements of the venture capital term sheet from terms related to economics to terms related to control It strives to give a balanced view of the particular terms along with the strategies to getting to a fair deal In addition to examining the nuts and bolts of the term sheet Venture Deals Second Edition also introduces you to the various participants in the pro Must read for anyone considering a venture

Brad Feld Ë Be Smarter Than Your Lawyer and Venture Capitalist pdf

Cess and discusses how fundraising works Fully updated to reflect the intricacies of startups and entrepreneurship in today′s dynamic economic environment Offers valuable insights into venture capital deal structure and strategies Brings a level of transparency to a process that is rarely well understood Whether you′re an experienced or aspiring entrepreneur venture capitalist or lawyer who partakes in these particular types of deals you will benefit from the insights found throughout this new boo This is the second time in my life I find myself doing the rounds to collect proper money from investors First time than fifteen years ago I used the Bagley and Dauchy classic “Entrepreneur’s Guide to Business Law” and I thought it was pretty good This book is uite simply in a different leagueThe authors seasoned VC entrepreneurs have a gift for writing and that’s what carries you through the book It’s all very serious of course but the writing style is as far from dry as you can imagineSo I’m reading this and the only thing that keeps me from saying “OK boys and girls this covers everything it’s the gospel” is the simple fact that if I was a VC I’d write a book that makes the case for the VC’s interests rather than the entrepreneur’s So from where I stand and I’m an entrepreneur I’d want an entrepreneur to have written the bookThe authors actually go a long way toward addressing this concern the summary for every section has actually been written by entrepreneur Matt Blumberg and rather often it’s hardly a summary; it emphasizes different point from Brad Feld’s lending credibility to the book and making the reader comfortableSo this is basically a tremendous book and if you’re raising money you need to buy it and read it If for some mysterious reason you don’t want a preview on the other hand look away now because what follows is my summary of the key points Chapter 1 “The Players”• You need to be talking to a Managing Director or a General Partner• You need a good experienced lawyer this is an awful place to skimp• Mentors are greatChapter 2 “How to Raise Money”• You need an elevator pitch an executive summary and a 10 slide powerpoint presentation• “We haven’t seen a business plan in than 20 years”• Your financial model must get the potential expenses right; forget about nailing the revenues• Do your homework on your VC and don’t press any clearly advertised wrong buttons• If you feel like your VC is a proctologist run for the hills• Ask your VC for references from entrepreneursChapter 3 “Overview of the Term Sheet• It’s not a letter of intent; it’s a blueprint for your future relationship with your VC• Two things matter economics and controlChapter 4 “Economic Terms of the Term Sheet”• Understand the difference between pre money and post money• The VC will try to stick the options pool in the pre money valuation• You must have a Plan B to be able to negotiate good economic terms• Competition aside valuation will depend on the stage of the company the team’s experience the numbers the suitability for the VC and the economic environment• Liuidation Preference arises because VCs come in with preferred stock and means the VC gets its money first This can be very dilutive if the next round is a down round• Fully Participating stock receives its participation amount and then shares in the liuidation process on an as converted basis• A cap can be put on the participation• Under “pay to play” provisions investors who do not participate in the next round get converted to common stock• Typically employee stocks and options will vest over four years and disappear if somebody leaves• Consideration must be given to treating the vesting as clawback with an IRS Section 83b election• Acceleration of vesting upon change of control is a key feature don’t leave it out• Antidilution provisions may be reuested by the investor for the case where new common stock is created after the financingChapter 5 “Control Terms of the Term Sheet”• At the beginning it will be 1 Founder 2 CEO 3 VC 4 2nd VC 5 outside board member• Don’t allow observers on your board• Make sure the Protective Provisions allow you to borrow a reasonable amount of money• Your investors need to vote as a single class• There will be a drag along provision majority of shares on as converted basis is the law in Delaware• There will be a conversion clause so VCs can vote alongside common stock when they must• An automatic conversion clause can be there to force VCs to give up on their preferred ahead of a sale• If there is an automatic conversion threshold it must be the same for all classes of stockChapter 6 “Other Terms of the Term Sheet”• Dividends might be reuested by dorky VCs with Private Euity background• Noncumulative dividends that reuire board approval are OK Supermajority even better• Redemption rights on the preferred say after 5 years can be put in by VCs that have the maturity of their fund in mind• Adverse Change Redemption Rights are evil because there is no good definition for adverse change• Conditions Precedent to Financing should be avoided at all costs• Information Rights are A OK• Registration Rights are A OK The world is good if you’re going public• Right of First Refusal had better be restricted to big investors• Right of First Refusal had better be pro rata• Restriction on Sales is a clause that allows the company itself the right of first refusal• The Proprietary Information and Inventions Agreement is a clause you actually need• A Co Sale Agreement allows investors to sell along with founders• A No Shop Agreement had better expire automatically if the sale falls through and should have a carve out for acuisitions• A standard Indemnification clause is good corporate hygiene but it means you need to buy directors’ insurance• The Assignment clause needs to be read carefully look for the loophole “assignment without transfer or the obligation under the agreements” which should not be thereChapter 8 “Convertible Debt”• Convertible converts at a discount to the next financing• The purpose is to defer the discussion about the value of the company• A floor on the value of the stock protects the entrepreneur• A ceiling protects the investor but can hurt everybody because it guides caps the next investors on price• You should put a reasonable time horizon on an euity financing as a condition or you will find the debt converted before you had time to do the financing• You should set upfront the minimum amount of financing that triggers the conversion• The interest rate on the debt should be as low as possible• There must be clauses regarding

book í Be Smarter Than Your Lawyer and Venture Capitalist Ë Brad Feld

Venture Deals Be Smarter Than Your Lawyer and Venture CapitalistA full revised edition of the Wall Street Journal bestselling book on startups and entrepreneurship As each new generation of entrepreneurs emerges there is a renewed interest in how venture capital deals come together Yet there is little reliable information focused on venture capital deals Nobody understands this better than authors Brad Feld and Jason Mendelson Forthan twenty years they′ve been involved in hundreds of venture capital financings and now with the Second Edition of Venture Deals the Let me tell you why this is book is outstanding and an invaluable addition to any entrepreneur’s armoury While listening to inspirational stories and insightful opinions from ‘hero founders’ such as Thiel Khosla and insert name from Horowitz to Hogwarts is great; it’s actually counter productive and in some ways even detrimental That’s not a criticism I love listening to such fireside chats and I don’t doubt their value as a platform for inspiration That said bear in mind that the worlds future super founders are not sharing your experience They are out there actually testing their hypothesis and actively pursuing their dreams; they are building their companies not envying the historic achievements of others And this is the beauty of this book it actually helps you with the ‘doing part’ of being an entrepreneurAn essential part of any start up is understanding the term sheet and learning how to negotiate with investors This book covers a wide range of essential VC deal topics from understanding what VCs are to how they raise their funds and importantly the structure and implications of the term sheet The latter point is the focus of the book and the most valuable takeaway Not learning about how a term sheet is created why the terms are there in the first place and the implications for you and your shareholders of said terms is ridiculous lazy and actually a sign of incompetence Now of course there will be situations where you do a bad raise and you actively understand your getting a bum deal But to put yourself in that situation because you didn’t prepare and learn about what you were getting yourself into that’s an error that could have been avoided This book explains what to do what not to do and how the VCs themselves are thinking It gives you an honest insight from the other side of the table from two highly experienced VCs with over 17 years of investing experience at the time of publication They have done hundreds of deals and negotiated thousands of term sheets You on the other hand will be faced with your first hence why this book is a must haveThe authors walk you through the whole term sheet explaining what on the surface may seem like complex terms in a thorough and easily digestible manner This book is certainly accessible to first time entrepreneurs with limited knowledge of finance or business That does not mean however that seasoned individuals would not benefit from its insight The amount of times I have heard ‘knowledgeable’ founders say stuff like ‘it’s okay we will just hire a lawyer’ is absurd Unless that lawyer is experienced in VC financings they likely know little than you and relying on them is a mistake and a costly one After reading this book you will know within 5 minutes of meeting any potential lawyer whether they are going to be valuable to you and your term sheet negotiations At just over 200 pages it is a uick read and in no way boring or tedious The style of the book follows the following overarching format what does the particular clause mean? why is it there? – why should the founder care? – why should the VC care? what are the implications of the clause? can it be negotiated? should you bother negotiating it etc Appendices include an example term sheet an example letter of intent and links to additional entrepreneur valuable resources There is also a thorough glossary in case you need to refer back to what some of the legal jargon actually meansStories of flying cars and worlds inhabited by super hot AI solved robots are sexy the idea of a book on term sheets is outright mundane Yet the later is inherently valuable to the entrepreneur The price of this book is 35 its value is easily tens to hundreds of 1000s I can only imagine the wide spread delight that passed through the VC community upon its release Buy it read it and then give it to someone elseNickW