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(aka “How to read the fine print when you raise venture money”)

                                    Vishy Venugopalan
   ...
Get an idea
1.
     Get a team
2.
         Angel Funding


     ??? Hiring

3.       Venture Capital
         Product dev ...
A non-binding expression of firm interest
A negotiable document
Gets hairy and technical very quickly
Let’s navigate this ...
Pre-money vs post-money
For early stage startups, this is hard
BUT, important to get it right

Single takeaway from this t...
The unit of ownership is a share
Classes of shares: preferred vs common
At exit: participating preferred
Multiple preferen...
New stock options are created for future hires
Lowers effective pre-money valuation
Example
Up round vs down round
Down round: investors expect to be made
whole
Full-ratchet vs weighted average
Why do you need a VC?
 Money
 Expertise, Network
Customers vs investors as sources of money
Build a stable business or mov...
Google “Fenwick & West term sheet survey”
Venture Hacks: http://venturehacks.com/
Ask the VC: http://www.askthevc.com/blog
@midtownninja, http://midtownninja.com
Currently: Analyst at Longworth Venture
Partners
In prior lives: software developer...
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Playing Minesweeper With Term Sheets

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Transcript of "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
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