Venture Deals, Third Edition: How to Negotiate Startup Funding - Smart Strategies for Entrepreneurs & Investors | Business Finance Book for Tech Startups & Venture Capital Deals
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Get the inside scoop on what venture capitalists want to see in your start-upVenture Deals provides entrepreneurs and start-up owners with a definitive reference for understanding venture capital funding. More than an overview of the process, this book delves into the details of the term sheet, the players, the negotiations, the legalities, and more, including what not to do. This new third edition has been updated to reflect the new realities of today's intricate start-up environment: You'll learn how the decisions are made, what every item on the term sheet means, what's up for negotiation, and what's not. You'll discover the secrets to expanding your prospects, negotiating the right deal for your company, and figuring out the right balance of funding versus control. You'll see the process through the eyes of the venture capitalist, the angel investor, the syndicate, and the lawyer and develop a strategy that makes funding your company a win for all parties involved. This book is designed to help entrepreneurs succeed by bringing transparency to the venture capital funding process. Veteran investors walk you through the process from start to finish and beyond to help you: Understand how venture capital funds work and how investors decide to invest Learn effective negotiation tactics based on game theory Delve into the meanings behind the term sheet's economic and control issues Avoid common issues that sink deals at the seed, early, mid, and late stages Written by the experts at Foundry Group, this unique guide is expressly geared toward those on the other side of the table; instead of parsing investor-focused advice and working backward, you get actual insider information on what the people with the money want to see. If you're ready to take the next step for your business, Venture Deals is an essential listen.
REVIEWS
****** - Verified Buyer
4.5
This is a great technical book, and it’s very helpful for entrepreneurs.I wish I had read it before taking VC money some years ago. This book is more like a practical guide and resource.Venture Deals is not going to directly help you answer the question whether or not you should take venture capital. But it’s going to help you a lot if you decide to use venture capital to fund your company.VCs’ obsession in getting preferred terms and stock in early stage financing annoys me tremendously. A company in its early stage needs partners that are willing to experiment a lot to build a great business model. And partners need to be onboard on equal terms, sharing the same risks and goals. You can’t time your success in an early stage venture, and it doesn’t sound good to me to rush into “scale mode” before finding a profitable product / market fit.Early-stage startup returns are binary — they either become failures or big successes with little in between that’s meaningful to investors. That’s why I don’t understand sophisticated early stage investors so worried about terms that put the entrepreneur in a very uncomfortable position. In my view, this is not fair and not wise. It doesn’t help their returns and it misaligns the shareholder’s goals.Raising capital under preferred terms is a loan that looks nice on the balance sheet.After series A, when you already built an exciting business model and your focus is on scale, it makes sense to take loans (equity capital with preferred terms). You can build a reasonable financial model and be more comfortable with the “all in” approach.Although venture capital firms invest on “what could go right”, they manage their investments obsessively on “what might go wrong.” And on early stage investment, this obsession seems irrational.
