- The players -- How to raise money -- Overview of the term sheet -- Economic terms of the term sheet -- Control terms of the term sheet -- Other terms of the term sheet -- The capitalization table -- Convertible debt -- Crowdfunding -- How venture capital funds work -- Negotiation tactics -- Raising money the right way -- Issues at different financing stages -- Letters of intent : the other term sheet -- Why do term sheets even exist? -- Legal things every entrepreneur should know. and Introduction: The art of the term sheet -- The players. The entrepreneur ; The venture capitalist ; The angel investor ; The syndicate ; The lawyer ; The mentor -- How to raise money. Do or do not; There is no try ; Determine how much you are raising ; Fund-raising materials ; Due diligence materials ; Finding the right VC ; Finding a lead VC ; How VCs decide to invest ; Closing the deal -- Overview of the term sheet. The key concepts: economics and control -- Economic terms of the term sheet. Price ; Liquidation preference ; Pay-to-play ; Vesting ; Exercise period ; Employee pool ; Antidilution -- Control terms of the term sheet. Board of directors ; Protective provisions ; Drag-along agreement ; Conversion -- 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 -- The capitalization table -- 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 -- Crowdfunding. Product crowdfunding ; Equity crowdfunding ; How equity crowdfunding differs -- How venture capital funds work. Overview of a typical structure ; How firms raise money ; How venture capitalists make money ; How time impacts fund activity ; Reserves ; Cash flow ; Cross-fund investing ; Departing partners ; Corporate venture capital ; Strategic investors ; Fiduciary duties ; Implications for the entrepreneur -- 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 ; 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? -- 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 -- Issues at different financing stages. Seed deals ; Early stage ; Mid and late stages -- 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 ; Registration rights ; Shareholder representatives -- Why do term sheets even exist? Constraining behavior ; Transaction costs ; Agency costs and information asymmetry ; Reputation constraints -- 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.
- "Get the inside scoop on what venture capitalists want to see in your startup Venture Deals provides entrepreneurs and startup owners with a definitive reference for understanding venture capital funding. More than an overview of the process, this book delves into the details of the term sheet, the players, the negotiations, the legalities, and more, including what not to do. This new third edition has been updated to reflect the new realities of today's intricate startup environment: you'll learn how the decisions are made, what every item on the term sheet means, what's up for negotiation, and what's not. You'll discover the secrets to expanding your prospects, negotiating the right deal for your company, and figuring out the right balance of funding versus control. You'll see the process through the eyes of the venture capitalist, the angel investor, the syndicate, and the lawyer, and develop a strategy that makes funding your company a win for all parties involved. This book is designed to help entrepreneurs succeed, by bringing transparency to the venture capital funding process. Veteran investors walk you through the process from start to finish and beyond to help you: Understand how venture capital funds work, and how investors decide to invest Learn effective negotiation tactics based on game theory Delve into the meanings behind the term sheet's economic and control issues Avoid common issues that sink deals at the seed, early, mid- and late stages Written by the experts at Foundry Group, this unique guide is expressly geared toward those on the other side of the table; instead of parsing investor-focused advice and working backward, you get actual insider information on what the people with the money want to see. If you're ready to take the next step for your business, Venture Deals is an essential read"--
"In this updated Venture Deals, Third Edition, they will use their years of experience in venture capital and early stage investing to show entrepreneurs how to succeed and prosper, outlining the essential elements of the venture capital term sheet and the tactics needed to negotiate"--
- 9781119259756 (hardback)
9781119259787 (Adobe PDF)
- Revised edition of the authors' Venture deals, c2013.
- Source of Acquisition:
- Purchased with funds from the Robert W. Scott University Libraries Fund in Support of Honor's Education; 2016
- Endowment Note:
- Robert W. Scott University Libraries Fund in Support of Honor's Education
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