Startup Professionals Musings

JANUARY 27, 2012

Remember a term sheet agreement is not a deal until the check clears. Your best strategy is to bring your own term sheet to the negotiation as a starting point. When a company is at its earliest seed stage, the terms tend to be the least complex. But due diligence and paperwork take time, and can change everything.

Term Sheet 223

Term Sheet Pre-Money Valuation Due Diligence Post-Money Valuation 223

Feld Thoughts

NOVEMBER 7, 2011

For some time Jason and I have felt that VC’s have had an unfair advantage when it comes to understanding term sheets. So a few years back we wrote a whole series of blog posts (the Term Sheet series ) which became the basis for the book Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist.

Term Sheet 133

Term Sheet Naming Entrepreneur 133

Gust

OCTOBER 17, 2011

Remember a term sheet agreement is not a deal until the check clears. Your best strategy is to bring your own term sheet to the negotiation as a starting point. When a company is at its earliest seed stage, the terms tend to be the least complex. Due diligence and paperwork take time, and can change everything.

Term Sheet 158

Term Sheet Pre-Money Valuation Due Diligence Post-Money Valuation 158

This is going to be BIG.

APRIL 13, 2022

Whenever I submit a term sheet, I always caveat it by saying the following: “This is the one time we’re completely misaligned. Plus, I would jump at the chance to explain where I’m coming from and the direct experience I’m basing my opinion on… so I can build up that trust with the founder. Founders seem to get that.

Founder 159

Founder Fiji CTO Hire Term Sheet 159

Startup Professionals Musings

SEPTEMBER 10, 2014

If all this checking sounds a bit paranoid and unnecessary, it may be time to take another look at some questionable investor practices and onerous term sheet requests. Look for investor experience in your business domain, as well as evidence of integrity and trustworthiness. It’s no fun for either side.

Technical Review 257

Technical Review Due Diligence Term Sheet Offshore 257

Berkonomics

MAY 15, 2014

A good example was during the negotiation of a term sheet. These usually involve a handful of angel investors, and a few entrepreneurs, who all want to build the very best term sheet for their exciting nascent enterprise. It was not until the later 1980s that the preferred share structure became popular.

Term Sheet 91

Term Sheet Angel Groups Angel Investor Deal Structure 91

Feld Thoughts

DECEMBER 28, 2010

On the heels of all the noise around Groupon’s $ 100m financing at a $7.5b (billion) post valuation, I thought I’d put out a call for “old VC term sheets – prior to 1990.&#. The basis for the book comes from the Term Sheet series that Jason and I wrote on this blog in 2005.

Term Sheet 118

Term Sheet Search Finance Valuation 118

YoungUpstarts

FEBRUARY 6, 2017

As an entrepreneur, your goal when raising financing is to get several term sheets — the documents describing the terms and conditions of financing. This is the firm that will give you a term sheet, take a leadership role in driving financing, and likely be your most active new investor. Most VCs love demos.

Venture Capital 100

Venture Capital Term Sheet Technical Review Due Diligence 100

Startup Professionals Musings

JULY 11, 2021

Angel and venture capital money always comes with ownership and management implications, starting with the obvious ones outlined in the term sheet for the deal. Every funding term sheet is followed by a set of milestone commitments, which should not be considered optional suggestions.

Term Sheet 433

Term Sheet Advisory Board Liquidation Preference Startup 433

VC Cafe

JANUARY 30, 2023

In my experience as a seed venture investor, founders that had a full and tidy data room not only came across as more professional, but actually accelerated the process of DD and legal. It’s also worth checking YC’s series A due diligence checklist.

Technical Review 103

Technical Review Due Diligence Cap Table Startup 103

Hunter Walker

APRIL 20, 2014

And your term sheet waits at the bottom. Sometimes their experience with a company, especially one which might have struggled, has given the VC a particular POV that you need to understand with greater nuance than “they seem to like investing in Social so I’m sure they’ll love our events discovery app.”

Term Sheet 97

Term Sheet Lean Distribution Web 97

Startup Professionals Musings

MARCH 27, 2016

If all this checking sounds a bit paranoid and unnecessary, it may be time to take another look at some questionable investor practices and onerous term sheet requests. Look for investor experience in your business domain, as well as evidence of integrity and trustworthiness. It’s no fun for either side.

Technical Review 120

Technical Review Due Diligence Term Sheet Offshore 120

Both Sides of the Table

OCTOBER 19, 2014

Because the hundreds of millions that it takes to greenlight a theatrical film could never be absorbed by a startup and because they way we experience media & characters has evolved dramatically over the past 20 years to a point where the starting point for media is often digital, gaming or even graphic novel oriented.

Technical Review 373

Technical Review North America Los Angeles Cofounder 373

View from Seed

MARCH 11, 2020

Typically, founders ask for investor references after a term sheet as been presented or there has been some clear approval from their team to move forward with the investment. But along the way, you should also be talking to folks in your network that have experience with the particular investor and firm.

Technical Review 279

Technical Review Due Diligence Term Sheet Seed Stage 279

Agile VC

MAY 26, 2011

This also appears as a guest post at Fortune’s Term Sheet. At the end of the process, which ran into the fall of 2003, we received term sheets from two firms and had a third which expressed interest in participating though not leading the round. to personalize and enrich the experience. May 26, 2011.

Term Sheet 178

Term Sheet Silicon Valley Technical Review Social Network 178

Diego Basch

FEBRUARY 28, 2012

We could have insisted on a term sheet, even though term sheets are non-binding. In my opinion, this is not the best lesson to learn from that experience. I believe the startup should have pushed for the term sheet as soon as possible. Sure, if you build a successful business then you’ve won.

Term Sheet 56

Term Sheet Redemption Acquisition Reputation 56

Hunter Walker

OCTOBER 31, 2020

Ok, now that’s out of the way, here’s the advice I give folks who have 2–3 years of work experience and are looking to get an entry-level role at a venture firm (typically called an Analyst or Associate). “Hi, Disclaimer: I’ve never been hired by a venture firm. Hi, thanks for reaching out. Notes and More. Things I’m Enjoying.

North Carolina 91

North Carolina Hiring Angel Investor Technical Review 91

Both Sides of the Table

OCTOBER 19, 2009

On December 2nd, 2006 I wrote the blog post published later in this post when I was CEO of startup Koral about my experiences in pitching VCs. I had really positive experiences such as working with Greg Gretsch at Sigma Partners where he championed us to a partners’ meeting where we sort of got crucified. My blog was wiped out.

Venture Capital 274

Venture Capital Term Sheet San Diego Viral 274

Both Sides of the Table

APRIL 19, 2011

Raised money from Splitrock Partners (of whom Matt thinks very highly) experience was so emotionally traumatic he came out of it vowing he’d never go thru that again – get cash flow positive RIGHT NOW!!! [if if you don't have experience with venture debt you might want to listen to this bit in the video - we talked a lot about how it works].

Acquisition 304

Acquisition Warrant Customer Term Sheet 304

Scott Edward Walker

JULY 7, 2011

Introduction This post originally appeared in the “ Ask the Attorney ” column I am writing for VentureBeat ; it is part of my ongoing series regarding venture capital term sheets. Moreover, there are significant restrictions under applicable State law regarding redemptions if the company does not have the legally-available capital.

Term Sheet 49

Term Sheet Redemption Venture Capital Preferred Stock 49

Both Sides of the Table

APRIL 13, 2011

And that that cycle continues so as the early stage first time entrepreneurs get experience…” “They turn into the mentors for the next generation. And it’s that combination with a long-term view. The following is a brief series of quotes from just ten of the approximately 30 different topics discussed in this incredible interview.

Technical Review 288

Technical Review Venture Capital Silicon Valley Software Review 288

Gust

MAY 22, 2012

This is a good time to reflect on my experience with locally based angel investment. We have a standard term sheet as a starting point. We’ve never seen that term sheet survive negotiations all the way through signing, but it’s usually a good start. We like the local connection. .

Technical Review 111

Technical Review Oregon Due Diligence Term Sheet 111

ReadWriteStart

SEPTEMBER 2, 2011

This can be an intimidating experience so I've put together a list of five tips for raising a venture round. Tip 4: Really Understand Key Terms. Once you get the term sheet make sure you know how to read it. Once you have a term sheet you are happy with, don't over negotiate.

Cap Table 125

Cap Table Term Sheet Liquidation Preference Technical Review 125

Both Sides of the Table

DECEMBER 17, 2009

Ability to Pivot – I don’t like to invest in people that I’ve never met before who come through my office wanting to have a term sheet within 30 days. Yes, there is the mythical company you all heard about that walked into Sequoia and had a term sheet 24 hours later. I’m sure that happens.

Entrepreneur 291

Entrepreneur Term Sheet Early Stage Affiliate 291

YoungUpstarts

SEPTEMBER 20, 2019

It’s often more all about fearing how tough VCs are going to be with their term sheets and ‘standard’ clauses. She is speaking from experience. Generous is not a word often associated with talking about negotiations between startup entrepreneurs and their investors. As well as how to work with pre and post-money valuations.

Technical Cofounder 127

Technical Cofounder Entrepreneur Cofounder Post-Money Valuation 127

Both Sides of the Table

MARCH 15, 2010

I was raising money for my second company and having been burned by term sheets on my first company I was eager to get myself knowledgeable before signing up to take VC again. I started reading Brad’s “term sheet&# series. So when I arrived late at my hotel I decided to try an experiment.

Social Network 347

Social Network Networking Southern California Term Sheet 347

Mucker Lab

AUGUST 27, 2014

My partner Erik Rannala has had a similar experience, having worked as a VC at Harrison Metal before moving down to LA to co-found our seed stage venture firm. From my experience, it’s not necessarily about “quality,” but rather about “sophistication.” While such an experience would be nice, it certainly is not a pre-requisite.

Los Angeles 138

Los Angeles Southern California Silicon Valley Technical Review 138

Startup Professionals Musings

JANUARY 17, 2015

For the elite startups and entrepreneurs who manage to attract the investor they dream of, and survive the term sheet negotiation, there is still one more hurdle before the money is in the bank. This is the mysterious and dreaded due diligence process, which can kill the whole deal. Status of the solution.

Technical Review 120

Technical Review Due Diligence Startup Term Sheet 120

View from Seed

AUGUST 17, 2021

But the experiment is looking to be a success. I was speaking to the former CFO of one of our most valuable portfolio companies the other day, and she recounted how this company once pitched 70 investors to barely get a term sheet. We executed it with discipline, but were open about how we would approach it.

IRR 205

IRR Dilution Founder Portfolio 205

Up and Running

MAY 11, 2016

David says, “As my hero Ben Franklin wrote, ‘Experience keeps an expensive school, but fools will learn in no other.’ Having spent a lifetime painfully learning from experience, my goal now is to short-circuit the time that you will need to spend in Ben Franklin’s expensive school.”. Who should read “The Startup Checklist”?

Technical Review 60

Technical Review Term Sheet Startup Due Diligence 60

This is going to be BIG.

MAY 5, 2023

She’s already a seasoned pro—three term sheets got signed in her room at the NICU where she spent the first 80 days of her life. A few months ago, one of the smartest and most accomplished professionals I know asked me to work with them as a coach and while we’ve only just started, it’s been a great experience so far.

Later Stage 218

Later Stage Venture Capital Term Sheet Limited Partner 218

This is going to be BIG.

AUGUST 21, 2023

There’s a term sheet. And then, even when they have, they still remain “interested” should Sequoia decide to throw down a term sheet.) was a term sheet. If they don’t like it, they can give you a better term sheet.” Now that we’ve established that, let’s talk about founder blind spots.

Cap Table 78

Cap Table Term Sheet Database Option Pool 78

View from Seed

AUGUST 17, 2021

But the experiment is looking to be a success. I was speaking to the former CFO of one of our most valuable portfolio companies the other day, and she recounted how this company once pitched 70 investors to barely get a term sheet. We executed it with discipline, but were open about how we would approach it.

IRR 156

IRR Dilution Founder Portfolio 156

View from Seed

MAY 31, 2023

The circumstances of closing one’s company are unique, but common emotions prevail in the experience of starting over, otherwise known as the “rebound.” However, it is your values, your experiences, your relationships, and so much more from which you should derive your self-worth. “You

Silicon Valley 156

Silicon Valley Cofounder Term Sheet Founder 156

The Next Web

SEPTEMBER 13, 2013

The term sheets tend to be fairly standardized and straightforward as well. Term sheets are littered with many more obscure protective provisions and onerous terms. We certainly have had this experience with our investors across Asia. From there, you typically get the thumbs up or down within a day or two.

Asia 132

Asia Silicon Valley India Term Sheet 132

View from Seed

AUGUST 17, 2021

But the experiment is looking to be a success. I was speaking to the former CFO of one of our most valuable portfolio companies the other day, and she recounted how this company once pitched 70 investors to barely get a term sheet. We executed it with discipline, but were open about how we would approach it.

IRR 136

IRR Dilution Founder Portfolio 136

Both Sides of the Table

MARCH 8, 2018

In 2017 we began inserting an “Inclusion Clause” into our term sheets because we believe that the culture one establishes at the earliest stages of one’s business will set out the course of how it will grow and develop. Many of us had experiences of asking entrepreneurs, “Why are none of our candidates women?”

Term Sheet 284

Term Sheet Los Angeles Open Source Portfolio 284