Playing Minesweeper With Term Sheets

1,482 views
1,439 views

Published on

Published in: Business, Economy & Finance
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
1,482
On SlideShare
0
From Embeds
0
Number of Embeds
186
Actions
Shares
0
Downloads
16
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Playing Minesweeper With Term Sheets

  1. 1. (aka “How to read the fine print when you raise venture money”) Vishy Venugopalan @midtownninja; http://midtownninja.com vishy.v@gmail.com
  2. 2. Get an idea 1. Get a team 2. Angel Funding ??? Hiring 3. Venture Capital Product dev & sales Profit 4.
  3. 3. A non-binding expression of firm interest A negotiable document Gets hairy and technical very quickly Let’s navigate this minefield together!
  4. 4. Pre-money vs post-money For early stage startups, this is hard BUT, important to get it right Single takeaway from this talk GET YOUR VALUATION RIGHT
  5. 5. The unit of ownership is a share Classes of shares: preferred vs common At exit: participating preferred Multiple preferences
  6. 6. New stock options are created for future hires Lowers effective pre-money valuation Example
  7. 7. Up round vs down round Down round: investors expect to be made whole Full-ratchet vs weighted average
  8. 8. Why do you need a VC? Money Expertise, Network Customers vs investors as sources of money Build a stable business or move to next thing? Remember: you can’t divorce your VC
  9. 9. Google “Fenwick & West term sheet survey” Venture Hacks: http://venturehacks.com/ Ask the VC: http://www.askthevc.com/blog
  10. 10. @midtownninja, http://midtownninja.com Currently: Analyst at Longworth Venture Partners In prior lives: software developer on Wall St, industry research analyst vishy.v@gmail.com

×