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

David Teten

JANUARY 19, 2021

Yes, via conversion rights at a valuation cap. Yes, via conversion rights at a valuation cap. As a result, unfounded hockey-stick graphs and unicorn promises give way to financial fluency, realistic expectations, frank conversations about what a business can credibly achieve, and transparency. . Flexible VC: Compensation-based.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

YoungUpstarts

OCTOBER 28, 2015

This past summer, the Lightspeed Summer Fellowships program invited selected guests to provide aspiring entrepreneurs a perspective into all aspects of starting a new company. The program provides entrepreneurs the resources and mentoring they need to build their companies and develop their skills. ” The Cost of Financing.

Convertible Security 100

Convertible Security IP Technical Review Software Review 100

www.seriesseed.com

DECEMBER 9, 2012

Series Seed Financing Documents Blog. Series Seed Financing Documents. Series Seed Term Sheet (v 2.0). Series Seed Term Sheet. Listed below are links to weblogs that reference Series Seed Financing Documents : 1 Reblog. SeriesSeed.com. Blog Archives.   Series Seed COI (v 2.0).

Finance 40

Finance Term Sheet Vesting LLC 40

Gust

SEPTEMBER 29, 2011

The most successful serial entrepreneurs in the world may found three or four, perhaps even eight or ten venture-backed startups over the course of their careers. It should therefore come as no surprise that an asymmetry of information exists, mostly gleaned from experience, between founders and investors in a venture financing deal.

Finance 178

Finance Term Sheet Preferred Stock Bridge Financing 178

Both Sides of the Table

SEPTEMBER 18, 2014

At an accelerator … Me: Raising convertible notes as a seed round is one of the biggest disservices our industry has done to entrepreneurs since 2001-2003 when there were “full ratchets” and “multiple liquidation preferences” – the most hostile terms anybody found in term sheets 10 years ago.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

Both Sides of the Table

MAY 13, 2018

If an investor isn’t engaging then they’re not suddenly going to get a term sheet. If we feel a mutual connection then my goal is to make your life easier by offering you a term sheet before you’re even raising and I’ll spend the time and effort trying to prove that it isn’t worth running a process.

Term Sheet 332

Term Sheet Due Diligence Campaign Sales 332

Both Sides of the Table

MAY 21, 2018

I was recently with an entrepreneur and talking with him about his fund raising process. He was in a later-stage financing round and was talking with many investors. I told him, “I know we don’t yet have a term sheet so you feel you need to listen to everybody’s request. How would you act then?

Term Sheet 217

Term Sheet Later Stage Demand Email 217

Gust

OCTOBER 12, 2011

Last week , we took the plunge and began dissecting an example term sheet for a convertible debt financing round piece by piece. I’ll continue with more specific terms and wrap up next week with some thoughts about recent changes and trends for the future. First, a word about the maturity date.

Finance 107

Finance Term Sheet Pre-Money Valuation Early Stage 107

Gust

OCTOBER 21, 2011

This week we move on to something near and dear to the hearts of entrepreneurs and investors alike: The exit, more formally known as a “ liquidity event.” Readers joining this series in progress may find it helpful to download the sample term sheet from my firm’s website and review the earlier posts covering the basics.

Finance 79

Finance Pre-Money Valuation Term Sheet Liquidity Event 79

Business Plan Blog

NOVEMBER 13, 2013

The first milestone in a new startup’s financing is called ‘Seed Capital’ which refers to the initial investment raised by the founders from their friends and family, or commonly referred to as FFF (Friends, Family and Founders), who mostly use their personal assets. *The Convertible Debt Financing. Raising Seed Capital.

Finance 93

Finance Accredited Investor Angel Investor Seed Capital 93

Gust

OCTOBER 5, 2011

Last week , we gave some attention to the “why” behind convertible note financing for early stage startups. In this installment, I’ll dig into the “how” by dissecting an example term sheet based on a real deal. As with so many subjects in law and finance, mastering the jargon is half the battle.

Finance 79

Finance Preferred Stock Term Sheet Early Stage 79

Startup Company Lawyer

AUGUST 31, 2012

Ted Wang believes that the “reason that capped convertible debt is the current market leader is that entrepreneurs have been conditioned over time to believe that convertible debt is (a) faster (b) cheaper and (c) better for them than equity investment.” Form of Convertible Security Term Sheet.

Convertible Security 73

Convertible Security Equity Security Preferred Stock 73

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 how DOES a VC think about financings at early stages? It’s very simple. For me it’s clear.

Pre-Money Valuation 150

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

www.seriesseed.com

DECEMBER 9, 2012

Series Seed Financing Documents Blog.   That’s because there are not that many issues to negotiate in a simple equity financing. In sum, Series Seed creates a level playing field between capped debt and equity documents in terms of speed and cost.  SeriesSeed.com. Blog Archives. 09/02/2010. First they ignore you.

Term Sheet 40

Term Sheet Ratchet Dilution Equity 40

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

Genuine VC

JANUARY 13, 2014

I’ve commonly heard entrepreneurs recite some version of “I don’t want to waste too much time fundraising because it will distract me from building my business, so I’ll only talk to a few potential funders.” The primary point of leverage which entrepreneurs can exert to counteract above is scarcity in the round.

Term Sheet 206

Term Sheet Venture Capital Valuation Portfolio 206

Both Sides of the Table

JANUARY 31, 2011

One of the most common questions that entrepreneurs who meet me for the first time like to ask is, “Do you miss being an entrepreneur? I thought I’d talk a bit about the differences I’ve experienced between being an entrepreneur & a VC – you know, from “both sides of the table.&#. On Being an Entrepreneur.

Entrepreneur 384

Entrepreneur Startup Salary Egypt 384

David Teten

JULY 20, 2011

Ten Tips for Entrepreneurs when Working with Lawyers. Discuss alternative arrangements such as caps, deferral until financing and equity as a form of payment. One of the biggest sources of friction between entrepreneurs and their attorneys comes from a lack of clarity surrounding billing expectations. by Ed Reitler.

Intellectual Property 128

Intellectual Property Entrepreneur Term Sheet Venture Capital 128

View from Seed

JANUARY 30, 2020

If you have a strong relationship with a founder that a VC has backed, that is usually the best intro you can get to kick off conversations with the investor. Once a VC has given you a term sheet or told you that they want to invest, it’s fair game to ask VC’s to introduce you to founders they have worked that you can reference.

Due Diligence 195

Due Diligence Partner Term Sheet Finance 195

Genuine VC

JANUARY 15, 2015

Of key importance, which we emphasize with our NextView portfolio companies when they’re out raising their Series A, is to run the conversations in parallel rather than serially. Often for a myriad of often idiosyncratic reasons, an entrepreneur is introduced to an attractive new potential VC partner late in the game.

Lead Investor 100

Lead Investor Term Sheet Venture Capital Portfolio 100

Gust

SEPTEMBER 17, 2014

Me: Raising convertible notes as a seed round is one of the biggest disservices our industry has done to entrepreneurs since 2001-2003 when there were “full ratchets” and “multiple liquidation preferences” – the most hostile terms anybody found in term sheets 10 years ago. These are all real conversations.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

Both Sides of the Table

DECEMBER 14, 2010

They had received a term sheet from a VC and were wondering whether to work with this firm. But what about once you have a term sheet? Get a reference list - Most entrepreneurs do almost no reference checks or at least do them very informally. Encourage the entrepreneur to get feedback on you and your firm.

Term Sheet 298

Term Sheet Venture Capital Stealth Cofounder 298

Feld Thoughts

OCTOBER 12, 2011

” I had a ton of fun talking to and answering questions from about 75 entrepreneurs who – at the minimum – enjoyed eating the great food and wine that SVB provided on a luscious evening in Palo Alto. Convertible Debt – Conversion Mechanics. Convertible Debt – Conversion In A Sale Of The Company.

Term Sheet 138

Term Sheet Warrant Open Source Valuation 138

Startup Lessons Learned

MAY 31, 2019

The reality today is that capital is more available than ever and entrepreneurs have become more sophisticated, so founders are looking for more than just cash from their venture backers. You've seen how venture capital works from both sides--as an entrepreneur and a venture capitalist.

Lean 108

Lean Venture Capital Conversion IPO 108

Both Sides of the Table

SEPTEMBER 5, 2012

My initial reaction to Adeo when we spoke was that while it may have solved some issues (debt versus equity) it didn’t solve the ones that I’ve been warning entrepreneurs about most loudly. Was Paul Graham right in his “high resolution” financing post? But entrepreneurs – convertible notes have no MINIMUM!

Ratchet 354

Ratchet Liquidation Preference Equity Stock 354

Both Sides of the Table

APRIL 23, 2017

It’s why raising a round of capital often feels like a hollow victory because it almost feels like a temporary reprieve from the Grim Reaper and in a way every new round just sets the bar higher to clear for the next round of financing or the hope of reaching profitability. The best VCs follow up but then so, too, to the best entrepreneurs.

Burn Rate 238

Burn Rate Term Sheet CTO Hire Fractional CTO 238

Both Sides of the Table

JANUARY 22, 2011

One of the most common questions that entrepreneurs who meet me for the first time like to ask is, “Do you miss being an entrepreneur? I thought I’d talk a bit about the differences I’ve experienced between being an entrepreneur & a VC – you know, from “both sides of the table.&#. On Being an Entrepreneur.

Entrepreneur 176

Entrepreneur Startup Salary Egypt 176

Both Sides of the Table

MAY 10, 2018

Many entrepreneurs let the early rejections get to them and it’s normal because when you hear “no” you think “what’s wrong with me!?” What you don’t know is that MANY of these financings have been a months’ long series of no’s, compromises, hard terms, heartaches, arguments, self doubt, followed by a “yes” that saves the day.

Term Sheet 232

Term Sheet France Technical Review Restful 232

Feld Thoughts

FEBRUARY 15, 2016

While going through my daily reading this morning, I came across a bunch of posts talking about how the sky was falling, Silicon Valley was in turmoil, financing was drying up everywhere, and all the unicorns were doomed. When I was an entrepreneur there was no public information about how term sheets worked or how investors thought.

Silicon Valley 70

Silicon Valley Term Sheet Early Stage New York 70

Feld Thoughts

JUNE 2, 2015

The other day, Mark Suster wrote a critically important post titled One Simple Paragraph Every Entrepreneur Should Add to Their Convertible Notes. As an angel investor, I have never asked for a liquidation preference on conversion that is greater than the dollars I’ve invested. Go read it – I’ll wait.

Liquidation Preference 70

Liquidation Preference Cap Table Angel Investor Post-Money Valuation 70

ReadWriteStart

MAY 8, 2012

So we asked a panel of eight successful young entrepreneurs from the Young Entrepreneur Council (YEC) about their startup funding successes (and failures) and the lessons they learned. Most entrepreneurs approach fundraising as a transaction. The best way to do that is to leverage the hard-won experience of real-world startup.

Cofounder 140

Cofounder Startup San Francisco Silicon Valley 140

Seeing Both Sides

JULY 28, 2010

You hear this word thrown out frequently in business conversations. Perhaps even harder to achieve in entrepreneurial settings between the venture capitalist and the entrepreneur, where the stakes are so high and the ever-present risk of dysfunctional behavior leading to a "Start-Up Soap Opera". Alignment. .

Entrepreneur 38

Entrepreneur Term Sheet Venture Capital Finance 38

SoCal CTO

JULY 13, 2010

" 8 Questions to Ask When Interviewing at a Startup - Instigator Blog , June 18, 2010 Job interviews are meant to be conversations. How-to learn about angel/vc term sheets - Gabriel Weinberg , June 28, 2010 I think every startup entrepreneur (and angel investor) should have a good understanding of financing term sheets.

Cofounder 175

Cofounder Technical Cofounder Term Sheet Startup 175

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. You should know every metric regarding customer acquisition, conversion and retention. You should know EVERYTHING about your business, product, customers and competition.

Software Review 164

Software Review Term Sheet Technical Review Angel Investor 164

Rob Go

AUGUST 9, 2016

I’m often surprised that entrepreneurs don’t do the same with anywhere near the same intensity and diligence. Entrepreneurs are typically only choosing one lead investor and board member per round. The best approach is to do your own research and reach out to the entrepreneur directly. This is not always easy to do.

Term Sheet 28

Term Sheet Due Diligence Lead Investor Portfolio 28

Growthink Blog

MAY 10, 2010

I've been working with entrepreneurs for more than 10 years, and by far the biggest question I get asked is. Like it or not, much of our success as entrepreneurs depends on our ability to secure enough funding. And when it comes to venture capital in particular, the vast, VAST majority of entrepreneurs go about it the wrong way.

Venture Capital 59

Venture Capital Term Sheet Business Plan Finance 59