The Players• The Entrepreneur• The Venture Capitalist• The Angel Investor• The Syndicate• The Lawyer• The Mentor(Brad Feld, Jason Mendelson, Venture Deals, Be smarter than your lawyer and Venture Capitalist)
How to raise moneyDo or do not, don’t tryDetermine how much you are raisingFund-raising materialsFind your right investor(s)Closing the dealUnderstand it is about: Economics, ControlFinancing rounds: seed, series a, series b, etc.
Economics (I)Price– Valuation• Premoney / postmoney• Fully diluted• (Warrants)Liquidation preference– From 1x to 10x to 1x– Investor participation (full, capped, none)– Liquidation event definitionPay to play, pay or dilute
Economics (II)VestingIndustry standard:– 4 years (1 year + 36 months); 1 year cliffSingle trigger vs. double triggeraccelerationEmployee poolAnti – dilution:– (full ratchet, broad-based, narrow-based weightedaverage) (carve-outs)Good / bad leaver
Board of Directors– Official member– ObserverProtective provisions– Veto rights / Qualified majority, for major board andshareholders decisions (list or annex)Drag along (investor / founders & investor jointly)Conversion (liq pref / control)Control