Venture deals : be smarter than your lawyer and venture capitalist / Brad Feld, Jason Mendelson.

Format:

Book

Author/Creator:

Feld, Brad, author.

Mendelson, Jason, 1971- author.

Series:

THEi Wiley ebooks.

THEi Wiley ebooks

Language:

English

Subjects (All):

Venture capital.

New business enterprises--Finance.

New business enterprises.

Physical Description:

1 online resource (300 pages)

Edition:

Third edition.

Place of Publication:

Hoboken, New Jersey : Wiley, 2016.

System Details:

Access using campus network via VPN at home (THEi Users Only).

text file

Summary:

Get the inside scoop on what venture capitalists want to see in your startup as you hit the fundraising trail. This is the highly anticipated third edition of the best-selling book which has become the definitive resource for understanding venture capital fundraising. Whether you are an entrepreneur, lawyer, student or just have an interest in the venture capital ecosystem, Venture Deals is for you. The book dives deeply into how deals are constructed, why certain terms matter (and others don’t), and more importantly, what motivates venture capitalists to propose certain outcomes. You’ll see the process of negotiating from the eyes of two seasoned venture capitalists who have over 40 years of investing experience as VCs, LPs, angels, and founders. They will teach you how to develop a fundraising strategy that will be a win for all parties involved. This book is designed to bring transparency to the venture capital funding process and includes such topics as: How to raise money; What terms matter and which ones don’t; How to negotiate a fair deal for everyone; What makes venture capitalists tick, including how they are compensated and motivated; How companies are valued by venture capitalists; How all current structures of funding work, including convertible debt, crowdfunding, pre-sales and other non-traditional methods; How these particular issues change through different stages of financing (seed, early, mid and late); and How to avoid business and legal pitfalls that many entrepreneurs make. And as in the previous editions, this book isn’t just a one-sided opinion from venture capitalists, but also has helpful commentary throughout from a veteran CEO who has raised many rounds of financing from many different investors. If you are ready to learn all the secrets and ins and outs of fundraising, Venture Deals is an essential read.

Contents:

Intro

Venture Deals

Contents

Foreword

Preface

Acknowledgments

Introduction: The Art of the Term Sheet

Chapter 1 The Players

The Entrepreneur

The Venture Capitalist

Financing Round Nomenclature

Types of Venture Capital Firms

The Angel Investor

The Syndicate

The Lawyer

The Mentor

Chapter 2 How to Raise Money

Do or Do Not-There Is No Try

Determine How Much You Are Raising

Fundraising Materials

Short Description of Your Business

Executive Summary

Presentation

Business Plan

Private Placement Memorandum

Detailed Financial Model

The Demo

Due Diligence Materials

Finding the Right VC

Finding a Lead VC

How VCs Decide to Invest

Using Multiple VCs to Create Competition

Closing the Deal

Chapter 3 Overview of the Term Sheet

The Key Concepts: Economics and Control

Chapter 4 Economic Terms of the Term Sheet

Price

Liquidation Preference

Pay-to-Play

Vesting

Exercise Period

Employee Pool

Antidilution

Chapter 5 Control Terms of the Term Sheet

Board of Directors

Protective Provisions

Drag-Along Agreement

Conversion

Chapter 6 Other Terms of the Term Sheet

Dividends

Redemption Rights

Conditions Precedent to Financing

Information Rights

Registration Rights

Right of First Refusal

Voting Rights

Restriction on Sales

Proprietary Information and Inventions Agreement

Co-Sale Agreement

Founders' Activities

Initial Public Offering Shares Purchase

No-Shop Agreement

Indemnification

Assignment

Chapter 7 The Capitalization Table

Chapter 8 Convertible Debt

Arguments For and Against Convertible Debt

The Discount

Valuation Caps

Interest Rate

Conversion Mechanics

Conversion in a Sale of the Company

Warrants

Other Terms.

Early-Stage versus Late-Stage Dynamics

Can Convertible Debt Be Dangerous?

An Alternative to Convertible Debt

Chapter 9 Crowdfunding

Product Crowdfunding

Equity Crowdfunding

How Equity Crowdfunding Differs

Chapter 10 How Venture Capital Funds Work

Overview of a Typical Structure

How Firms Raise Money

How Venture Capitalists Make Money

Management Fees

Carried Interest

Reimbursement for Expenses

How Time Impacts Fund Activity

Reserves

Cash Flow

Cross-Fund Investing

Departing Partners

Corporate Venture Capital

Strategic Investors

Fiduciary Duties

Implications for the Entrepreneur

Chapter 11 Negotiation Tactics

What Really Matters?

Preparing for the Negotiation

A Brief Introduction to Game Theory

Negotiating in the Game of Financings

Negotiating Styles and Approaches

The Bully (aka UAW Negotiator)

The Nice Guy (aka Used-Car Salesman)

The Technocrat (aka Pocket Protector Guy)

The Wimp (aka George McFly)

The Curmudgeon (aka Archie Bunker)

Always Be Transparent

Collaborative Negotiation versus Walk-Away Threats

Building Leverage and Getting to Yes

Things Not to Do

Great Lawyers versus Bad Lawyers versus No Lawyers

Can You Make a Bad Deal Better?

Chapter 12 Raising Money the Right Way

Don't Be a Machine

Don't Ask for a Nondisclosure Agreement

Don't Email Carpet Bomb VCs

No Often Means No

Don't Ask for a Referral If You Get a No

Don't Be a Solo Founder

Don't Overemphasize Patents

Chapter 13 Issues at Different Financing Stages

Seed Deals

Early Stage

Mid and Late Stages

Chapter 14 Letters of Intent-The Other Term Sheet

Structure of a Deal

Asset Deal versus Stock Deal

Form of Consideration

Assumption of Stock Options

Representations, Warranties, and Indemnification

Escrow.

Confidentiality/Nondisclosure Agreement

Employee Matters

Conditions to Close

The No-Shop Clause

Fees, Fees, and More Fees

Shareholder Representatives

Chapter 15 Why Do Term Sheets Even Exist?

Constraining Behavior and the Alignment of Incentives

Transaction Costs

Agency Costs and Information Asymmetry

Reputation Constraints

Chapter 16 Legal Things Every Entrepreneur Should Know

Intellectual Property

Employment Issues

State of Incorporation

Type of Corporate Structure

Accredited Investors

Filing an 83(b) Election

Section 409A Valuations

Authors' Note

Appendix A: Sample Term Sheet

Appendix B: Sample Letter of Intent

Appendix C: Additional Resources

Foreword to the First and Second Editions

Glossary

About the Authors

Index

Read on for an excerpt from Brad Feld's: Startup Communities

Chapter Three Principles of a Vibrant Startup Community

Historical Frameworks

The Boulder Thesis

Led by Entrepreneurs

Long-Term Commitment

Foster a Philosophy of Inclusiveness

Engage the Entire Entrepreneurial Stack

EULA.

Notes:

Includes index.

Description based on print version record.

ISBN:

9781119259800

1119259800

9781119259787

1119259789

9781119259794

1119259797

OCLC:

964912521