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• Co-Founder and Managing Director of Foundry Group• Managing Director, CAO and GC at Mobius Venture
Capital• Adjunct Professor at CU• Co-author of www.askthevc.com• Lawyer at Cooley Godward Kronish• Software Engineer at Accenture• Frustrated Musician• House-poor home remodeler• www.jasonmendelson.com
Know the “rules” beforehand• Short communications, versus long. Emails versus phone calls,
Executive Summaries versus Business Plans• Well crafted communications, just doesn’t save VC time, but shows
quality of thought of the entrepreneur• Don’t make rookie mistakes like asking for a NDA
Know your market, know you competitors and be original• Being the 256th social network is not original• Saying you have “no competition” is not believable• Not knowing the market is not wise (especially for you!)
VCs need to invest in transformative companies, not “next best”• It’s hard to sell stuff as a startup. Be compelling
Be smart, but don’t be arrogant• VCs have large egos and some even are smart
What’s Hot• How do I make my company more attractive?
Do your homework Talk to people – even VCs!
• Informal conversations are good• Fundraising conversations before ready are bad
Do all that YOU can do / don’t sweat what you can’t• Be crisp
VCs have two limited resources – time and money• Do I need a team?
You need at least one partner No one person knows everything Also proves that someone else believes in what you are doing A good management team has comprehensive experience and great
• What is the affect on VCs and your fundraising? Going to scare some VCs Going to really scare late stage investors
• What normally are VC expectations of exits? 50% of companies return zero 70% probably don’t return that “much” Really need big returns on the rest (5x? 10x? 100x?) Old days and exit was around 5 years, now more like 7 years
What VCs Don’t Want To Tell You• We aren’t valuation experts. We don’t know your valuation, either
It’s part art and part science. Okay, it’s mostly art
• We don’t know the right amount of money for you to raise as well as you do. We have past experience as our largest guide Get to a milestone. Don’t get stranded Raise an amount appropriate to the particular VC
• You can know everything we know about negotiating term sheets www.feld.com (Term Sheet Series)
• VCs have certain ideas regarding ownership 10% / 20% / 30% - more?
• Nothing is better than an intro from a VC’s friend / trusted source However, an introduction from another VC who is not investing in
your company is usually bad• Failure is not always Failure. It can be attractive