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Negotiation with VCs 1/2

Negotiating with VCs 2/2 http://altgate.com/blog/2008/08/10-tips-on-negotiating-with-vcs.html 4.

http://www.avc.com/a_vc/2009/03/what-is-a-good-venture-return.html But is 3x a good venture return? It depends entirely on the stage you invest in and your "batting average". Most people know that "batting average" is the percent of times you get on base (based on the number of times at bat). Returns they are looking for

This server could not verify that you are authorized to access the document requested. Either you supplied the wrong credentials (e.g., bad password), or your browser doesn't understand how to supply the credentials required. Norms = context, not guidance http://wallen.typepad.com/wallen/2008/11/web-funding-norms-are-a-context-not-a-guidance.html

A painful process http://500hats.typepad.com/500blogs/2007/09/vcs-tech-lawyer.html Innovate. Automate. Simplify. This means: Seriously. If you guys REALLY WANT to be in the business of providing money & legal advice to startups, THEN GET WITH THE GODDAMN PROGRAM.

5. TS items: power vs. money http://altgate.com/blog/2008/07/the-science-art-of-term-sheet-negotiation.html

It's explained a bit further down this pearltree. Continue reading, you'll get there... ;_) by wallen Oct 6

I'm not sure to fully understand the concept of "option pool refresh" though by PED Oct 6

Good overview of the various dimensions by wallen Mar 1

Anti-dilution is usually mild. Broad-based weighted average anti-dilution says that a number of anti-dilution shares are issued (or the conversion price of the preference shares is adjusted) based on a formula nicely explained by Brad Feld back in 2005 . Here is how you can get really screwed: there is one version of anti-dilution whereby the number of shares issued to the investor is FULLY readjusted if subsequent financings are downrounds. Say you raise $1M at $10 per share and hence issue 100,000 shares to your VC, in exchange for 10% of your company. VC terms that can really hurt http://venturehacks.com/articles/terms-that-hurt

http://www.avc.com/a_vc/2009/04/the-three-terms-you-must-have-in-a-venture-investmemt.html 3) The right to a board seat I listened intently and have been practicing what Milt preached ever since. In recent years, I've gotten comfortable doing a few deals without the board seat in very specific circumstances. But I've mostly followed Milt's advice to me and I have been well served by it. 3 must haves for a VC

http://altgate.com/blog/2008/05/how-liquidation-preferences-work.html 14 Liquidation preferences

Rationale for the latter

http://www.burningdoor.com/askthewizard/2007/04/venture_terms_liquidation_pref.html Liquidation is bad. That means something happened that i didn't want to happen and we went bankrupt, so if I am a confident entrepreneur, I don't need to pay attention to this section, right? Well, that was more of a rhetorical question, but no, that's not correct. This section defines how the moneys are going to get doled out on almost any kind of non-ipo exit, good or bad. Pay careful attention. Still minimize it!

Exactly. Liquidation preferences can kill an entrepreneur... by wallen Oct 6

Bon si je comprends bien, faut faire gaffe à ces histoires de liquidation preference et pas se focus complètement sur la valo vu qu'il y a moyen d'y perdre des plumes... by PED Oct 6

http://fiveyearstoolate.wordpress.com/2009/12/15/binary-pricing/ Binary Pricing Find out how other VC firms would value this company, and finally See how low the insiders were willing to take until they did it inside (in effect, find the market clearing price). Look at how similar companies were being acquired, The problem most VCs eventually discover is that for the big winners (like Ciena , Priceline , Cerent , WebMD and Google , most of which I looked at at one time or another), it actually doesn’t matter how seemingly overpriced the deal is. These winners created fantastic returns almost irrespective of what you paid.

2. How much competition there is with other potential funding sources More is better. What valuation? http://www.jasonmendelson.com/wp/archives/2008/12/whats-the-value-of-my-startup.php

It’s only in the event that the deal works out that the percentage of the business (the thing that valuation is supposed to determine) matters in terms of how much money we make. Another important factor to consider is that only a relatively small portion of early stage venture investments really work out in the way they were supposed to when the investment was made. In my experience, which is based on 17 years in the business and over 100 different early stage investments over that time period, there is a 1/3 rule. The fact is that almost all venture capital deals are done as convertible preferred stock investments. Valuation - not important? http://www.avc.com/a_vc/2004/07/valuation.html

How much of Google did KP and Sequoia own? You can say 'well that was Google' but it wasn't the greatest venture deal of the decade when they made their investment. We took 10pcnt of a company a few years ago that has become our best investment. We own less than 10pcnt of it now. http://www.avc.com/a_vc/2009/10/the-we-need-to-own-baloney.html The 'We Need To Own' Baloney

Redeye VC: Company Math vs VC Math

VC Mandatory Moonshot - The Unwritten Terms in the Investment Ag

Full ratchets are a plague: illustrative example

Avoid tranch-investing

...b/c it's a scam

Angel Term Sheet Evolution Video | term sheets for angel investo

An entrepreneur's view

Founder vesting

Compensation and equity holdings

Can VC force a sale easily

Case examples of some terms

Some other terms' posts

How to close quickly

Complete bus. diligence before signing

Indeed, that's why from an entrepreneur perspective all the most important aspect need to be cleared out before signing it. Post-termsheet should be left for lawyers on small details... by wallen Oct 14

Discuss your plans before signing

Appendix: TS items definition and technical stuff

Equity Investment Simulation

Seed rounds: Converts vs Equity

vesting

pre-money

Je vais aller regarder ça. merci. by wallen Sep 4

Pas mal de discussions chez cdison la semaine dernière sur la termsheet, si tu as qq minutes pour updater ;) by PED Sep 3