Feld Thoughts

FEBRUARY 18, 2020

Week 1 – Introduction of key players/Form or join a team Week 2 – Fundraising/Finding the Right VC Week 3 – Capitalization Tables/Convertible Debt Week 4 – Term Sheets: Economics & Control Week 5 – Term Sheets Part Two Week 6 – Negotiations Week 7 – Letter of Intent/Getting Acquired. We are running the Venture Deals Online Course again. Registration is now open and it runs from March 8, 2020 – May 1, 2020. It’s produced by Techstars and Kauffman Fellows.

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Term Sheet Capitalization Table 124

Feld Thoughts

MARCH 10, 2019

Week 1 – Introduction of key players/Form or join a team Week 2 – Fundraising/Finding the Right VC Week 3 – Capitalization Tables/Convertible Debt Week 4 – Term Sheets: Economics & Control Week 5 – Term Sheets Part Two Week 6 – Negotiations Week 7 – Letter of Intent/Getting Acquired. We are running the Venture Deals Online Course again. Registration is now open and it runs from April 7, 2019 – May 31, 2019.

Term Sheet 153

Term Sheet Capitalization Table Email 153

Feld Thoughts

JANUARY 27, 2020

The Players Preparing for Fundraising How to Raise Money Overview of the Term Sheet Economic Terms of the Term Sheet Control Terms Other Terms of the Term Sheet Convertible Debt The Capitalization Table Crowdfunding Venture Debt How Venture Capital Funds Work Negotiation Tactics Raising Money the Right Way Issues at Different Financing Stages Letters of Intent: The Other Term Sheet How to Engage an Investment Banker Why Do Term Sheets Even Exist?

Term Sheet 104

Term Sheet Investment Bankers Capitalization Table Venture Capital 104

Feld Thoughts

SEPTEMBER 22, 2017

Week 3 – Capitalization Tables/Convertible Debt. If you are interested in raising venture capital, I encourage you to sign up and take the course. Kauffman Fellows and Techstars are running another cycle of the Venture Deals course with me and Jason Mendelson. Signups close tomorrow as the course runs from 9/24/17 – 11/13/17. The course is free to everyone. The seven-week course, which is about five hours of work each week, has the following agenda.

Term Sheet 110

Term Sheet Capitalization Table Venture Capital 110

Startup Professionals Musings

MAY 22, 2020

Yet if you are on the other side of the table, there are some other key questions that you need to ask, which will tell you more about the real success prospects for this business. How complex is the capitalization table? Every startup founder loves to prompt for questions from investors and potential key team members about their vision, and the huge opportunity that can be had with their disruptive technology.

Due Diligence 198

Due Diligence Sweat Equity Burn Rate Intellectual Property 198

Startup Professionals Musings

AUGUST 29, 2018

Professional investors like to keep tight control of capitalization tables and all stock owners, to facilitate their own payoff when a sale, merger, or public stock offering is held. Although professional investors may discount the impact of crowdfunding, they can’t argue with the growth of this new industry in the last few years. According to statistics by Fundly , crowdfunding contributed $34 billion in funding last year around the world, including peer-to-peer lending.

Equity 157

Equity Due Diligence Stock Valuation 157

Startup Professionals Musings

APRIL 8, 2015

Yet if you are on the other side of the table, there are some other key questions that you need to ask, which will tell you more about the real success prospects for this business. How complex is the capitalization table? Every startup founder loves to prompt for questions from investors and potential key team members about their vision, and the huge opportunity that can be had with their disruptive technology.

Due Diligence 228

Due Diligence Sweat Equity Burn Rate Intellectual Property 228

Early Growth Financial Services

AUGUST 23, 2013

You want a valuation firm that has experience with all types of valuation for companies like yours, including stock option management and complex capitalization tables. Valuation. You know you need one. Annually. What you may not know is that it really does matter who performs your valuation. There are a lot of valuation companies out there, so I know many entrepreneurs are tempted to just shop around until they find the lowest price, but this is a mistake.

Valuation 56

Valuation Stock Options Capitalization Table Early Stage 56

Startup Professionals Musings

APRIL 10, 2016

Yet if you are on the other side of the table, there are some other key questions that you need to ask, which will tell you more about the real success prospects for this business. How complex is the capitalization table? Every startup founder loves to prompt for questions from investors and potential key team members about their vision, and the huge opportunity that can be had with their disruptive technology.

Sweat Equity 159

Sweat Equity Burn Rate Intellectual Property Accredited Investor 159

Feld Thoughts

AUGUST 15, 2019

If you’re an entrepreneur who wants to raise capital and grow your business, this online course teaches you the basics you need to know for working with VCs. And, if you are starting off as a VC or a lawyer for venture capital deals and you want a refresher on the core issues in a term sheet, this online course is for you. Techstars and Kauffman Fellows are once again running the Venture Deals online course that Jason Mendelson and I put together several years ago.

Term Sheet 30

Term Sheet Capitalization Table Venture Capital Video 30

YoungUpstarts

OCTOBER 24, 2013

“If you are an angel investor and a venture is seeking capital from you, insist on getting its Worthworm report. One of the challenges for investing in startups has always been the lack of an established way for founders and investors to actually measure and decide on the valuation of the startup concerned.

Pre-Money Valuation 133

Pre-Money Valuation Web Valuation Angel Investor 133

Feld Thoughts

JULY 18, 2011

The book originated in 2005 when Jason and I wrote a long series of posts on this blog about a typical Venture Capital term sheet. The table of contents gives you a feel for this. The Capitalization Table. How Venture Capital Funds Work. My partner Jason Mendelson and I are psyched to announce that our book – Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist – has been published and is now available.

Term Sheet 153

Term Sheet Venture Capital Capitalization Table Finance 153

OnlyOnce

JULY 18, 2011

As Brad noted in his launch post , the book’s table of contents says a lot: The Players. The Capitalization Table. How Venture Capital Funds Work. Book Short: I Wish This Existed 12 Years Ago. Brad Feld has been on my board for over a decade now, and when he and his partner Jason Mendelson told me about a new book they were writing a bunch of months ago called Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist , I took note.

Term Sheet 77

Term Sheet Capitalization Table Finance Venture Capital 77

Gust

DECEMBER 6, 2012

Nobody should ever be on the capital table for what they did once in the past. What’s an advisor to a startup deal? Technically, advisor is one of those bucket terms that means anything and everything, depending on context.

Equity 114

Equity Capitalization Table Startup Naming 114

YoungUpstarts

FEBRUARY 6, 2017

If a VC offers you a term sheet, expect their lawyers to ask you for more information like capitalization tables, contracts, material agreements, employment agreements, and board meeting minutes. Brad Feld and Jason Mendelson are cofounders of Foundry Group, a Boulder, Colorado–based venture capital fund.

Venture Capital 143

Venture Capital Term Sheet Due Diligence Elevator Pitch 143

Up and Running

JULY 2, 2014

We were targeting to raise around $3 million in investment capital. This should be clearly spelled out in your Capitalization Table , or “Cap Table” as it’s commonly called. A Cap Table shows who owns the company, what the ownership shares are, and what the owners have invested in exchange for that share. Can they create and advise on a Capitalization Table?

Dilution 130

Dilution Due Diligence Cap Table Intellectual Property 130

Pascal's View

JULY 9, 2017

Many entrepreneurs lose track of what they have been cooking up in the cap table. The following scenarios represent typical recipes for trouble: Company X is early in business development, has a near-term need for capital to get through the next 3-6 months, and the management team has no understanding of how the equity should be divided up among its various constituencies (this includes option pools and what ownership stakes investors typically require at various development stages).

Valuation 42

Valuation Covenant Equity Post-Money Valuation 42

Business Plan Blog

DECEMBER 26, 2013

A capitalization table showing the post-investment ownership structure of the business to include founders, option pool and investors in the current round. 10 Steps to Success With Angel Investors. Raising funds from business angels may be difficult, time consuming and even frustrating but for the right founder with the right project it may be the preferred option. Your chances of success are likely to reduce the more you stray from the 10 guidelines discussed below.

Angel Investor 47

Angel Investor Due Diligence Pre-Money Valuation Angel Groups 47

Feld Thoughts

SEPTEMBER 2, 2011

As Finance Fridays continues, we are introducing the concept of the Cap Table. This week they set out to create their cap table and hire a CTO. Later, if they sell, the low tax basis and capital gains tax rates result in a lower tax liability than if they didn’t file the 83(b) election. Rather, it gets recorded in a document called the Capitalization Table (or “Cap Table”), which shows the ownership stake each person or entity has in the business.

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Cap Table CTO Option Pool Hiring 122

Board Effect

MAY 10, 2019

Capitalization tables—”cap tables” for those who don’t have time for extra syllables—map the balance of power in a company. If org charts are about people power , cap tables are about money power. In reality, however, cap tables are often far more complex. Let’s dive deeper into understanding cap tables; what they are, why (and to whom) they matter, and how they’re used. What is a cap table? Why do cap tables matter? How are cap tables used?

Cap Table 40

Cap Table Dilution Liquidation Preference Equity 40

David Teten

NOVEMBER 17, 2011

Enter Raul: This capital table startup options valuation model was created with the purpose of valuing options for an illiquid, early-stage start-up. In my previous life as an investment banking analyst at Citi (Latin America industrials group), we used to spend hours deriving the appropriate weighted average cost of capital (WACC) for a particular company. Finally, financial assumptions such as capital structure and taxes had to be considered. Venture Capital

Employee 123

Employee IRR Mexico Valuation 123

onstartups.com

JULY 11, 2012

But most Angels will fail to get back the capital they've invested (let alone make money), and it's not because they don't pick good companies or back great entrepreneurs — it's because they're completely mistaken about an Angel's role in the investing cycle. This is a guest post by Dave Balter. Dave is the CEO of BzzAgent , founder of Smarterer , an active angel investor and a holder of proms. You can follow Dave on twitter @davebalter.

Dilution 65

Dilution Angel Investor Investment Bankers Valuation 65

www.mattbartus.com

SEPTEMBER 24, 2011

I can tell you that, among other problems, any uncertainty in the capitalization table when the company is acquired will be resolved squarely and unequivocally in favor of the buyer. Cooley Report Reviews Second Quarter Venture Capital Financing Trends. Venture Capital. A View from the Valley. Perspectives on issues affecting founders, startups and investors from a veteran startup lawyer in Silicon Valley. Blog blog archive. Quora Answers. About Matt.

Equity 40

Equity Vesting Silicon Valley Intellectual Property 40

abovethecrowd.com

APRIL 20, 2016

In Silicon Valley boardrooms, where “growth at all costs” had been the mantra for many years, people began to imagine a world where the cost of capital could rise dramatically, and profits could come back in vogue. About this same point in time, the journalists that focus specifically on the venture capital industry noted something quite profound. You can no longer simply look at the cap table and estimate your return. Competition also has access to capital.

Valuation 76

Valuation Silicon Valley Term Sheet Recapitalization 76

Up and Running

SEPTEMBER 10, 2014

According to the Angel Capital Association: Angels (private money) invest in 55,000 startups each year versus 1,500 companies by VC (venture capital) funding. However, entrepreneurs still need to approach angel investors offline for larger amounts of capital. They represent a segment of the available capital that can fund your business who aren’t hounded by deals on a regular basis. Capitalization Table and Shareholder Roster.

Angel Investor 131

Angel Investor Accredited Investor Due Diligence Angel Groups 131

Up and Running

JULY 14, 2015

They never worked with startups who needed to put together private placement memos for investors, capitalization tables and all of those things. Smart money should bring more to the table than just cha-ching in your bank account. It should also bring network, social network of other investors, should also help bring customers, it should bring some maybe some management experience that you may or may not have, it should bring more to the table than just the money.

Incubator 124

Incubator Email Oregon Forecast 124

www.xconomy.com

JUNE 9, 2012

New San Diego VC Firm Emerges as ‘The Moneyball of Venture Capital’. Here’s some big news for San Diego’s innovation economy: There’s a new venture capital firm in town—and its investment methodology represents a fundamentally different approach to the conventional business model for venture investing. As part of their decision, Correlation also tells startups up front how much capital will be reserved for follow-on investments—and the firm’s partners won’t take a board seat. “We

San Diego 40

San Diego Venture Capital San Francisco Detroit 40

www.payne.org

SEPTEMBER 22, 2011

Important disclaimer: Ive got experience negotiating stock compensation packages from both sides of the table. Owning the stock has a potentially significant tax advantage: it starts the timer for long-term capital gains. Any capital asset held for more than a year is taxed a low, long-term capital gains rate (currently 15% percent, maximum). Your 25,000 shares are now worth $250,000 and you only have to pay long-term capital gains tax when you sell.

Equity 50

Equity Employee Vesting Stock 50

www.quora.com

SEPTEMBER 22, 2011

Update Link to Questions, Topics and People Add Find Questions, Topics or People Comment Rocky Kahn 1 vote by Marc Bodnick To a large degree compensation depends what one brings to the table. Is it ethical for a startup CEO to create a capitalization structure that has an unusually large number of outstanding shares, but then refuse to disclose a total share count when recruiting employees and advisors? Quora Home About Login Sign Up Similar questions will display as you type.

Equity 40

Equity Widget Salary Employee 40