Gust

DECEMBER 27, 2012

It sounds obvious, but the majority of entrepreneurs who pitch me have obviously never thought through many of the major issues surrounding their companies. With #1 – #3 under your belt, you should start preparing the components you will use to support your pitch to outside investors. Understand your business.

Software Review 164

Software Review Term Sheet Technical Review Angel Investor 164

ReadWriteStart

FEBRUARY 19, 2020

Colombia has a few industries with massive potential for disruptive transformation , in particular, health and finance. The government creates programs to help entrepreneurs. Elmer Ortega ’s Bogotá-based fintech company offers credit and digital financial services and raised $14M this year with lead investor Andreessen Horowitz.

Colombia 146

Colombia America Technical Review Startup 146

View from Seed

JANUARY 27, 2021

. $100M is a meaningful increase from our $50M third fund, though it’s still quite small in the grand scheme of venture, especially amid the recent wave of late stage financings and SPACs. We believe that this fund is the perfect size for us to be the best possible partners to early-stage entrepreneurs today.

LP 411

LP Early Stage Seed Stage Venture Capital 411

View from Seed

FEBRUARY 26, 2020

In previous blog posts I’ve written about the two main approaches to building a seed round syndicate – the subscription method (where an entrepreneur presets a structure with a convertible note or SAFE and recruits investors who subscribe to the round, all without a term-driving lead investor) and a term-driving lead investor approach.

Syndicate 257

Syndicate Syndication Lead Investor Venture Capital 257

View from Seed

FEBRUARY 23, 2021

The classic scenario is when a VC has a signed term sheet to lead a round, but has left room open for another meaningful investor. At this point, the investor and the entrepreneur work together to develop their perfect list of potential partners, and then do targeted outreach to try to bring this investor into the round.

Syndicate 207

Syndicate Syndication Term Sheet Cofounder 207

Gust

SEPTEMBER 27, 2014

To begin with, it is important to understand some basic facts about the world of entrepreneurial finance: There are many more entrepreneurs than there are investors, with the result that only one company out of every 400 that seeks venture funding actually receives it.

Angel Groups 159

Angel Groups Elevator Pitch Software Review Deal Flow 159

The Next Web

OCTOBER 7, 2013

As stated earlier, investors will dilute ownership upon nearly every round of financing. You might assume the lead investor wants a 20 percent stake and 15 percent option pool each time there’s a Series ‘Blah’ every 12 to 18 months, but this is admittedly too simple. Entrepreneur Insider Analysis and Opinion How-To''s'

Engineer 129

Engineer Dilution Option Pool Vesting 129

Pascal's View

JULY 9, 2017

Andrew Krowne and I recently co-wrote an article in Tech Crunch , Why SAFE Notes Are Not Safe for Entrepreneurs. At its core, this issue points to the lack of understanding about the importance of post-money valuation by both entrepreneurs and investors.

Post-Money Valuation 49

Post-Money Valuation Valuation Cap Table Covenant 49

Gust

OCTOBER 26, 2011

As we conclude our convertible note financing series, there are assorted terms commonly seen in term sheets and deal documents that are worth touching on briefly. The Note Purchase Agreement and Convertible Promissory Note are essential documents for any convertible note financing.

Finance 79

Finance Term Sheet Covenant Accredited Investor 79

SoCal CTO

SEPTEMBER 8, 2010

He blogs to 10,000 web entrepreneurs at Software by Rob and co-hosts the podcast Startups for the Rest of Us. How I Think About Seed Investing As A VC - Feld Thoughts , August 2, 2010 Last week saw an explosion of discussion around seed investing, including plenty of negative comments around VCs as seed investors.

Startup 191

Startup CTO Hire Cofounder Venture Capital 191

David Teten

SEPTEMBER 5, 2014

Like many established finance & media companies, GLG knows that the tech startup sector is a growing part of the economy. Prabhdeep Singh: Ask any entrepreneur about their most valuable resource when they’re making tough decisions, and you’ll hear the name of someone, not something. Or, you can go straight to the source.

New York 114

New York Technical Review Networking Advisory Board 114

View from Seed

OCTOBER 21, 2014

In short, more and more entrepreneurs are signaling their price expectations earlier in their seed fundraise process. In theory, there are three levels of pricing for an entrepreneur to potentially signal to a prospective investor: 1. Or, in the case of a convertible note, they’ll explicitly state a valuation cap.

Valuation 336

Valuation Founder Seed Stage Angel Investor 336

View from Seed

JANUARY 11, 2021

As high-conviction, seed stage investors, we are inherently relationship-driven, and we value meeting exceptional founders face-to-face. With the onset of COVID-19, we, along with the broader ecosystem of venture capitalists and entrepreneurs, have been pushed to rapidly adapt, forge connections, and do our jobs remotely.

Venture Capital 350

Venture Capital Cofounder Early Stage Seed Stage 350

Scott Edward Walker

AUGUST 9, 2013

To Our Clients & Friends: Welcome to our weekly series “ Helping Entrepreneurs Succeed.” Each week, we share a favorite video of a successful entrepreneur, investor or business leader on a variety of topics. This week, we present Mike Hirshland , the founder of Resolute Ventures and a very smart investor.

Seed Stage 53

Seed Stage Entrepreneur Dilution Valuation 53

This is going to be BIG.

FEBRUARY 27, 2011

This is where your business starts to incur real costs—but it’s also where entrepreneurs don’t like to be short term “sellers” of their equity. They’re hesitant to raise money—selling equity to investors—when things look great.

Dilution 104

Dilution Equity Hiring Partner 104

Genuine VC

JULY 30, 2012

Sharing these expectations early in potential lead investor discussions fundamentally qualifies the conversations, but it also runs the risk of prematurely losing a potential financing partner or reducing options to maximize a financing process outcome. Above market. But, also by definition, that just can’t be the case.

Valuation 136

Valuation Pre-Money Valuation Angel Investor Syndicate 136

Both Sides of the Table

JUNE 5, 2015

I am reminded of this problem every time my firm does a financing where a note went before us but more specifically I was reminded by this great post by Brad Feld to talk about the pre-money vs. post-money conversion issue. So you can see why this leads to a lot of tension and misunderstanding. It’s very simple. No problem.

Pre-Money Valuation 150

Pre-Money Valuation Option Pool Post-Money Valuation Dilution 150

Steve Blank

FEBRUARY 3, 2011

One of the biggest mistakes entrepreneurs make is not understanding the relationship they have with their investors. We were just about to have a board meeting in another week to talk about raising another round of financing to keep our struggling disaster afloat. At times they confuse VC’s with their friends. Lets Go to Lunch.

San Francisco 333

San Francisco Silicon Valley Limited Partner Venture Capital 333

The Startup Magazine

AUGUST 18, 2017

The opening keynote session will define directions on Aligning the Role of Government Policymakers, Incumbent Banks, FinTech Innovators, Investors, Multilateral Agencies, MNOs and the Private Sector to Create a Dynamic Ecosystem for FinTech in Africa.

Africa 62

Africa Ethiopia Elevator Pitch Technical Review 62

mashable.com

NOVEMBER 2, 2011

AngelList is brilliantly designed to make it easy for investors to write checks to entrepreneurs. Naval and Nivi , the founders of AngelList, took the very best social mechanics from Facebook , Twitter and LinkedIn to create a “social proof” that ultimately makes investors comfortable writing checks. Holiday Lists.

Social Media 80

Social Media Startup Angel Investor RSS 80

Genuine VC

JULY 10, 2012

There are essentially two distinct basic strategies for startup entrepreneurs to raise a seed round of capital: Subscription approach – An entrepreneur sets a structure (usually a convertible note) and recruits individual angel investors who subscribe to the round, all without a term-driving lead investor.

Syndicate 207

Syndicate Syndication Seed Stage Portfolio 207

The Equity Kicker

DECEMBER 3, 2012

Chris Dixon wrote an interesting post yesterday which described two different ways of thinking about startup opportunities – the finance lens and the product lens. whilst investors typically look at opportunities from an investment perspective, asking the question ‘is there an opportunity to make a lot of money from this investment?’.

Finance 116

Finance Valuation Lead Investor Startup 116

Version One Ventures

JANUARY 28, 2013

Seed financing grew from 89 fundings in Q1 2009 to more than 500 in Q3 2012. That means there are a lot more seeded startups out there: an excess demand for a limited supply of Series A financings. I recently had lunch with an entrepreneur who asked what he should do. Do your homework on potential investors.

Burn Rate 140

Burn Rate San Francisco Vesting Finance 140

View from Seed

JANUARY 26, 2016

There are a number of factors that have contributed to the rise of pre-seed rounds, but the strongest have been the frothy late-stage financing market, coupled with both the scaling-up of some of the early winners in the institutional seed ecosystem and the scaling-down of some larger funds that retrenched after the financial crisis.

Seed Stage 120

Seed Stage Early Stage Cofounder Finance 120

Scott Edward Walker

JUNE 9, 2019

Over the past few weeks, two of my clients have received financing term sheets in which the investors requested super pro rata rights. Simply put, pro rata rights permit the investor to maintain its percentage ownership in subsequent financing rounds. Introduction. Pro Rata Rights.

Preferred Stock 56

Preferred Stock Term Sheet Dilution Stock 56

Both Sides of the Table

MAY 13, 2018

If you’re raising a round where a new lead investor would invest $5 million the VC fund must have no less than $100 million and if you’re looking for them to write $15–20 million as the lead their fund realistically should be at least $400 million. Remember, I was an entrepreneur for 10 years before a VC).

Term Sheet 332

Term Sheet Due Diligence Campaign Sales 332

Feld Thoughts

DECEMBER 15, 2016

.” It’s exactly the opposite of how I think about how to configure a board of directors, but I recognize that it’s a default case for many VCs and, subsequently for many entrepreneurs and companies. Post seed boards tend to be founder and investor-centric. It’s a bad default that needs to be reset.

Sales 70

Sales Seed Stage Early Stage Finance 70

Feld Thoughts

AUGUST 2, 2010

They are: Fred Wilson: Lead Investors, Dipshit Companies, and Funding Every Entrepreneur. And importantly, Mark encourages all entrepreneurs to make sure they understand a VC’s seed strategy before taking money, which I strongly agree with. Mark Suster: Understanding a VC’s Seed Funding Policy is Critical.

Angel Investor 152

Angel Investor Cofounder Syndicate Syndication 152

BeyondVC

SEPTEMBER 13, 2006

As an entrepreneur, you are most likely spending most of your time building your product and getting it to market. Make sure your basic finances are in order and that all customer contracts, employment-related documents, financing paperwork, etc. is all stored properly and securely.

Technical Review 60

Technical Review Intellectual Property Cofounder Due Diligence 60

Both Sides of the Table

MARCH 6, 2011

I was saying that I was happy it was all out in the open because I felt at least everybody could now understand the issues & opportunities from the perspectives of angels, entrepreneurs and VCs. Jody didn’t exactly have an easy time fund raising because he’s not one of the prototypical Silicon Valley funded entrepreneurs.

Valuation 292

Valuation Deal Flow Lead Investor Cofounder 292

Professor VC

APRIL 1, 2010

was part of a Dow Jones VentureWire webinar last week titled Negotiating An Angel Deal: What Angels, Entrepreneurs & VCs Need to Know. One comment made by Jason was that angels tend to be less sensitive than VCs on valuation and can potentially make it difficult to get a venture financing done at acceptable valuation. Steve Bennet.

Term Sheet 32

Term Sheet Angel Investor San Jose Venture Capital 32

Hippoland

JANUARY 4, 2017

Usually, an equity round is kicked off by a “lead investor”. Typically, this lead investor decides the terms of the round and also invests the majority of the money that will go into your company. That lead investor will also usually help you fill out the remainder of your round with other investors.

Convertible Security 48

Convertible Security Equity Security Silicon Valley 48

Agile VC

JANUARY 12, 2012

Even the best entrepreneurs often hear “no” from potential investors. Good investors try to be clear in terms of what they look for in terms of progress and milestones of the startups they invest in. Im a former Silicon Valley entrepreneur turned East Coast VC. How To Think About The Future. Author howerl.

Seed Stage 100

Seed Stage Silicon Valley Syndicate Syndication 100

Hunter Walker

APRIL 4, 2015

This traditionally means entering at the seed round stage (an initial financing of < $3m, lead or co-lead by us), but we’ve got access to these Straight to A rounds as well via pre-existing relationships with their founders or the lead VCs. What are the risks of seed funds participating in these Straight to As?

Cofounder 48

Cofounder Lead Investor Valuation Framework 48

Both Sides of the Table

SEPTEMBER 23, 2010

I thought I’d try to look at it from a different lens, that of the entrepreneur. Asked to respond to the topic, “What collusion happens with AngelList, if any&# I wrote the following: “Um, let’s not be naive here and not think that a “form of collusion&# doesn’t happen on virtually any financing round.

Entrepreneur 292

Entrepreneur Technical Review Valuation Stealth 292

Reid Hoffman

JANUARY 26, 2021

Selecting your investor board members should be a careful and thoughtful process, even if that means it requires more work. One common mistake is for entrepreneurs to simply select whichever venture capital firm is offering the highest valuation. At least that approach doesn’t destroy value, but it is a huge missed opportunity.

Startup 36

Startup Equity Early Stage Green 36

Feld Thoughts

JUNE 2, 2010

But there’s no reason for an angel investor – especially an individual one – to drag the entrepreneur through a long, protracted due diligence process. Don’t torture entrepreneurs: Remember, you are supposed to be an “angel investor”, not a “devil investor.” Be a force for good in the universe.

Angel Investor 167

Angel Investor Boston Due Diligence Cofounder 167