「Venture Deals second edition」
Don’t let a VC talk you out of using your lawyer of choice just because the lawyer ins’t from a nationally known firm or the lawyer rubs the VC the wrong way. This is your lawyer, not your VC’s lawyer.
Mentors are great. There’s no reason not to give someone a small success fee if they truly help you raise money.
We always recommend starting that you are raising a specific number, and then, when you have more investor demand than you can handle, you can always raise more.
The problem you are solving, the size of the opportunity, the strength of the tam, the level of competition or competitive advantage that you have, your plan of attack, and current status. Summary financials, use of proceeds and milestones are also important. Most good investor presentations can be done in 10 slides or fewer.
If a VC passes on a deal with you, whether graciously or by not returning your emails and your calls, do your best to politely insist on feedback as to why. This is one of the most important lessons an entrepreneur can learn and is especially useful during the fund-raising cycle. Don’t worry that someone is telling you that your baby is ugly. Ask for the feedback, demand it, get it, absorb it, and learn from it.
Typically be five board members: 1. Founder 2. CEO 3. VC 4 A second VC 5. An outside board member.
The single biggest mistake people make during negotiation is a lack of preparation.
Spend some time beforehand getting to know whom you are dealing with. Some people are so easy to find that you can Google us and know just about everything we think. If you get to know the other side ahead of time, you might also be able to play to their strengths, weaknesses, biases, curiosities, and insecurities. The saying “knowledge is power” applies here.
if you find that your potential investor is a jerk to you in negotiating your deal, you may want to think twice about this person becoming a board member and member of your inner circle.
having solid plan B (and a Plan C, and a Plan D…) is one of your most effective weapons during the negotiation process.
There’s one exception to it not being suitable to ask for a referral. IF you have a relationship with the VC, ask why the answer is no. If the response to that question is something about the VC firm rather than your company, then you may ask for a referral to another firm that might be a better fit. However, be respectful here - if the VC doesn’t want to make a referral, don’t push it.