Tag: venture deals
Our friends at Dorsey & Whitney are hosting me and Jason Mendelson this Thursday, October 20th from 4pm to 6pm to drink beer together and discuss “what really matters” in a venture deal. While the event requires registration, I’ve been told that copies of Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist will be given to whomever shows up (until they run out) and that the beer will be a collection of yummy local microbrews provided by Devil’s Canyon Brewery Company in Belmont.
Jason and I will sign any copy of our book that appears at the event. We’ll also drink a few beers with you. Plus, who could resist a title of an event sponsored by a law firm that says “What The $@%@$” in the title.
4pm – 6pm
Dorsey & Whitney
305 Lytton Ave.
Palo Alto, CA 94301
Last night I gave a talk hosted by SVB at their Palo Alto office. It was part of the “Never Ending All Old Is New Again Venture Deals Book Tour.” 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. Oh – and I signed a bunch of copies of Venture Deals.
Several questions came up about Convertible Debt. We touch on it in Venture Deals but realized that we didn’t cover it in enough depth so Jason recently wrote a Convertible Debt series on Ask the VC. The series is now complete – here are the links to the posts in order.
- Convertible Debt Series
- Convertible Debt – The Discount
- Convertible Debt – Valuation Caps
- Convertible Debt – Conversion Mechanics
- Convertible Debt – Conversion In A Sale Of The Company
- Convertible Debt – Other Terms
- Convertible Debt – Warrants
- Convertible Debt – Early Versus Late Stage Dynamics
- Convertible Debt – Wrap Up
If you feel like we missed anything, or got anything wrong, or were confusing in our explanation, please chime in on the comments on the post. If you want to see an actual convertible debt term sheet or the actual legal documents, take a look at the TechStars Open Sourced Model Seed Financing Documents.
As a bonus to the evening, I got some direct, constructive feedback from one of the attendees via email later that night. While the “thank you” and “good job” notes are nice, I only learn when someone criticizes me (hopefully constructively, but I can handle it in any form.) The feedback was:
May I make a constructive criticism regarding your talk tonight? Your answers to audience questions tend to be overly long and rambling…..you “overanswer,” to invent a word. You start strong and respond right to the essence, but then your focus blurs and you keep taking verbal baby steps away from the thought stream. If you trim a minute or two off each answer, you can call on more people and hear more questions, which sends more people home happy. I think if you self-critique a video of yourself in a Q&A session, you’ll arrive at the same conclusion.
It’s a good suggestion. I often try to provide additional context to the question, but it sounds like – at least for one person – I went off on a few space jams that weren’t additive. I love the phrase “overanswer” – it’s a lesson from TV interviews 101 (e.g. just answer a question – any question – quickly). Something to ponder as I continue the Never Ending All Old Is New Again Venture Deals Book Tour.
Jason Mendelson and I are doing office hours at the Boulder Bookstore on Monday 9/26. We will be hanging out from 2pm – 5pm and chatting with whomever comes by. It’ll also be a chance to buy a copy of Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist from your local bookstore and get a copy of it signed by both of us while you wait.
We’ve been asked by a lot of folks how to get a copy of the book signed by us. This is one way; the other is to buy a signed copy directly from us off of the AsktheVC site. Either way, we’d be happy to see you on Monday if you want to swing by. I think Jason will be wearing his wig from I’m a VC.
On This Week In TechStars #6, David Cohen interviews Jason Mendelson on the making of our
hard hitting documentary on VCs music video “I’m A VC.” The interview happens in Jason’s basement music studio where much of I’m A VC was written, composed, sung, recorded, and – well – whatever you do in a music studio.
If you haven’t yet watched I’m A VC, what are you waiting for? And, if you have a connection to Stephen Colbert or Jon Stewart, give me a shout as we’d love to help them educate the world about venture capitalists, along with helping promote our book “Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist.” Mendelson on the Colbert Report – doesn’t that sound cool?
In the “if you can’t laugh at yourself, who can you laugh at” category, I present the video I’m A VC. The formal press release, Foundry Group Premiers Documentary Film About Secret Lives of Venture Capitalists, explains things more fully.
My partner Jason Mendelson created, composed, wrote, sang, and produced the whole thing and explains the back story of I’m a VC on his blog. It’s awesome working with incredibly talented people who have a sense of humor and a willingness to make fun of themselves while letting me make fun of myself. And no – I can’t dance for shit, nor can I sing.
Entrepreneurs – you make our world go around. This is dedicated to you.
I’ve always loved getting books signed by the author. As an author of two books, it makes me smile a huge smile when someone asks me to sign a copy of my book for them.
With Kindlegraph, I can finally sign my Kindle books. I met the founder, Evan Jacobs, at Glue a few months ago. He had just started putting books up on it and I immediately told him that I was game to put Do More Faster up. I tweeted about it and signed a few.
Now that Venture Deals is out I’ve got them both up on Kindlegraph. If you have a Kindle version of either book, or you are buying one, and want me to sign it, just go to my Kindlegraph author page and request for me to sign the book.
When Jason and I set out to write Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist, we both agreed that we wanted to try to create as useful and durable a reference guide for entrepreneurs interested in raising a round of venture capital as we could. As a result, we created a Resources page on Ask the VC and decided to load it up with legal documents that are part of a venture capital financing.
Now, while I’d like to be able to simply do all of my financings with a handshake, or possibly on a napkin written in crayon, I also wish I had a herd of unicorns, surrounded by rainbows, a balanced US government budget, and agreement on how to address the debt ceiling issue.
As a step in the right direction, Jason and I decided to open source our Foundry Group form legal documents. You can find them on the Ask the VC Resources page. Included are our standard forms for the following:
- Series A Term Sheet
- Series A Preferred Stock Purchase Agreement
- Investor Rights Agreement
- Co-Sale Agreement
- Voting Agreement
- Series A Restated Certificate of Incorporation
If you do a deal with us, simply feel free to mark them up. Or use them for other deals. Or study them, in conjunction with Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist, to know what we do and don’t care about (yes – there are some hidden extra-bonus tips in the forms for you to enjoy if you want.) Of course – all of the traditional legal disclaimers apply (e.g. “You take full responsibility for using these documents. We aren’t your lawyers and we give no warranties (express or implied) that they documents are any good or legally enforceable.”) So make sure you have a good lawyer advising you, even if you are smarter than him.
We’ve included plenty of other bonus material on this page, including LOI / merger docs and seed deal docs. We’ve got more coming, including a thorough dissection of a convertible note (and all the various permutations), but we thought this would be plenty to digest for now.
And if you find some unicorns, or typos in the documents, send them my way.
When Jason and I started AsktheVC, one of our goals was to have a place where entrepreneurs could ask us questions and get direct answers. We did this for a while, getting to most of the questions which has created a very nice corpus of answers to several hundred questions easily searchable by Lijit.
- How Did We Get Our Idea For Our Startup?
- How Much Equity Should an Early Stage COO/CFO Get?
- How Do You Negotiate a Carve Out With Investors?
Of course, these are our answers and opinions, and many of the questions are subjective, but they form a starting point for any entrepreneur looking for answers to a bunch of random questions from a VC.
Now that we have relaunched AsktheVC with the publication of Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist, we’ve started answering questions again at AsktheVC. You’ll notice a “Have A Question” link just above the Do More Faster image on the right sidebar. We’ll try to answer them within a few days of them coming in. And, if you have a different opinion to any of our answers, please weigh in on the comments.
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. We are also relaunching AskTheVC – the companion website to the book that we maintained for several years, went dormant for a while, but is alive with content once again.
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. It took us a year or so to get all the way through it, but it was fun and generated an enormous amount of positive feedback from entrepreneurs (and would be entrepreneurs) who told us how helpful it was for them to understand how a VC term sheet actually worked.
People regularly suggested that we turn the blog series into an actual book. Until about a year ago we’d simply encourage people to PDF up the posts and do whatever they wanted with them. We got great feedback from students and entrepreneurs all over the world who said they were on the receiving end of the posts, that the posts had been used as the curriculum for a class, or that they had simply referred to them during a negotiation and they were “more helpful than their lawyer.”
After I wrote Do More Faster: TechStars Lessons to Accelerate Your Startup with David Cohen (the CEO of TechStars), Jason and I decided to write Venture Deals. We knew the term sheet series would only be a small part of the book and would have to be re-written, so we just got to work. Once again, it feels amazingly good to “ship the book” – it’s remarkably hard work to get from “an idea for a book” to an actual book.
For those who think this is just a reprint of the blog posts, they make up less than 20% of the book and have been completely rewritten. The table of contents gives you a feel for this.
- The Players
- How to Raise Money
- Overview of the Term Sheet
- Economic Terms of the Term Sheet
- Control Terms of the Term Sheet
- Other Terms of the Term Sheet
- The Capitalization Table
- How Venture Capital Funds Work
- Negotiation Tactics
- Raising Money the Right Way
- Issues at Different Financing States
- Letters of Intent – The Other Term Sheet
- Legal Things Every Entrepreneur Should Know
While it’s a chewy topic, we’ve tried to keep it light, fun, and enjoyable. But we’ve also tried to make it a must read for any entrepreneur, or would be entrepreneur, or student interested in entrepreneurship, or junior lawyer that is working on deals, and our parents. We’ve created a dynamic companion site at AskTheVC, are working on a teaching guide, and have a few entertaining surprises up our sleeve that will be launched in early September.
Since I’m a shameless book salesman, you’ll be hearing plenty more from me on this blog. But for now, go take a look at Fred Wilson’s wonderful review titled Be Smarter Than Your Lawyer and Venture Capitalist.