As each new generation of entrepreneurs emerges, there is a renewed interest in how venture capital deals come together. Yet there really is no definitive guide to venture capital deals. Nobody understands this better than authors Brad Feld and Jason Mendelson. For more than seventeen years, they've been involved in hundreds of venture capital financings, and now, with Venture Deals, they share their experiences in this field with you.
Inspired by a series of blog posts - created by the authors after a particularly challenging deal - this reliable resource demystifies the venture capital financing process and helps you gain a practical perspective of this dynamic discipline.
Whether you're an experienced or aspiring entrepreneur, venture capitalist, or lawyer who partakes in these particular types of deals, you can benefit from the insights found throughout this book. Engaging and informative, Venture Deals skillfully outlines the essential elements of the venture capital term sheet - from terms related to economics to terms related to control. Feld and Mendelson strive 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 also introduces you to the various participants in the process, discusses how fundraising works, reveals how VC firms operate, and describes how to apply different negotiating tactics to your deals. You'll also gain valuable insights into several common legal issues most startups face and, as a bonus, discover what a typical letter of intent to acquire your company looks like.
©2011 Jason Mendelson, Brad Feld (P)2011 Gildan Media Corp
Venture Capital has a lot of tricky names and concepts, they explain them well and clearly
There could be a PDF file along with the book with all the examples and numbers cited... not always you can write them all down, and to follow the thinking it could be easier than to copy them in a paper and follow the audio
As a former author (of legal, tax, financial, and business issues), I was impressed with Brad and Jason's crystal-clear writing style.
There were so many things I found insightful. Here are a few of their recommendations: 1. Select the right lawyer. The lawyer you pick is a reflection of you. If you pick a "lame" lawyer (my word, not theirs), your own credibility drops more than a notch or two. 2. Keep tabs on (and control of) the negotiation with the VCs. Do not just hand over the reins to your attorney. The way to stay involved and in charge is to understand what is important in the negotiations and what is not. This way you can prevent each side's lawyers from quibbling over unimportant points which only serve to run up legal bills...and/or so you can prevent your attorney from straining your relationship with your investors. 3. Understand that the early rounds of financing can have a big effect on the future of your company (and they explain why, what you need to know, and what mistakes you should not make). 4. Understand the concept of ANTI-DILUTION. It's very important! 5. Understand FOUNDER VESTING. For example, if one of the founders decides to leave after a year or two, you do not want him or her to walk away with a large ownership stake, while you remain at the company and continue to work (hard).
Brad and Jason also teach you that not all VC firms are the same. Different firms specialize in different types of startups or in different stages of the funding process. And some firms are much better at mentoring entrepreneurs than others. The authors also discuss the TIMING of the funds run by VCs (most funds run approximately 10 years, and they explain why this is important for you to know).
They also help you to understand things from the perspective of VCs and angel investors, so you can present yourself well to them.
And all throughout, they teach you how avoid mistakes and nasty pitfalls that could result in serious and regrettable problems. In short, this book is exactly what every entrepreneur, VC, and advisor needs.
Thanks Brad and Jason. Your book is so well done, and written in such a wonderful, kind spirit. You have made an important contribution. I am tremendously impressed.
Though I enjoyed this audio version very much, I do believe that it is important to have this in a book or kindle form, too, so that you can refer to it as needed.
Nice presentation of technical subject. I was afraid it might be dry; but just enough humor to make it an enjoyable commute listen.
The book provides a very useful summary to entrepreneurs and aspiring practitioners alike. The financial structure, the legal structure and documentation is well explained. If you are making your first contact with the world of venture capital I highly recommend this book.
There are things that u don't know that you don't know. This book covers them.
Should have read it a long time ago. Better late than never.
The book is very helpful, however you may need to take notes as there is much detail to take in. I would have purchased the hard copy in hindsight.
You will need to constantly stop and start the audio to take in the information.
Please note I had a relatively low amount of knowledge in VC before starting this book.
This book is packed with facts about the deal. If you've ever had a business, thought about investing in someone's business, its more than just equity at stake. The contracts Feld goes through in this book break it down line by line, explaining what is normal, vs when one person (the investor or entrepreneur) is getting the upper hand. Real life examples, candid opinions -- this is everything I wish lawyers, mentors, or teachers should have told me years ago but didn't. I imagine listening to this book once or twice a year to stay sharp.
Highly recommend this for the VC noobs out there. I thought I understood the deal making process since I've been through a few on the outside. It helped.
If you are thinking of starting a business and eventually taking on VC capital this is a must read for you! I learned so much relevant information in a very short amount of time.
Great VC overview
The authors did a great job describing every step of the VC and liquidation process.
My only issue was around the chapters dealing with specific items in the term sheet, which to me was the most important section. While the overview was valuable, much of the discussion was just the narrator reading legal clauses from an actual term sheet. This was often difficult to follow and, well, boring. It would have been much more interesting had they broken down each item and explained what it meant in layman's terms, and with more examples.
For someone who has limited (no) experience with VC term sheets this was a useful outline of what one can expect, which will no doubt stop me looking like a complete fool when the time comes for a deal
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