Venture Funding Secrets
Book Description Publication Date: November 16, 2011 "This is probably the single most valuable resource for the entrepreneurs aspiring to build successful companies"—Ron Conway, Special Adviser, SV Angel, and investor in Facebook, Google, Twitter, Foursquare, PayPal, Zappos "I highly recommend Venture Capitalists at Work. This book captures the personalities and approaches of a number of leading VC practitioners and displays the heart and soul of the venture capital process, by offering an exclusive window into the voice of the practitioners."—Gus Tai, Trinity Ventures "Venture Capitalists at Work is a foundational pillar in an entrepreneur's understanding and resources. This is a first in terms of the level of detail, quality of discussion, and value to the entrepreneur."—George Zachary, Charles River Ventures and Investor in Twitter Venture Capitalists at Work: How VCs Identify and Build Billion-Dollar Successes offers unparalleled insights into the funding and management of companies like YouTube, Zappos, Twitter, Starent, Facebook, and Groupon. The venture capitalists profiled—among the best in the business—also reveal how they identify promising markets, products, and entrepreneurs. Author Tarang Shah, a venture capital professional himself, interviews rising VC stars, Internet and software investment pioneers, and venture investment thought leaders. You’ll learn firsthand what criteria venture capitalists use to make investments, how they structure deals, the many ways they help the companies they fund, avoidable mistakes they see all too often, the role of luck in a success, and why so many startups fail. Venture Capitalists at Work also contains interviews with those on the receiving end of venture money—entrepreneurs in high-profile startups that went on to achieve great success. Whether you’re an entrepreneur, an aspiring VC, an M&A professional, or an ambitious student, the knowledge you will gain from Venture Capitalists at Work could provide a significant shortcut to success. What you’ll learn How venture capitalists identify promising markets, entrepreneurs, and companies What venture capitalists are looking for in entrepreneurs and business plans How to build an “A” team and a culture of success Successful relationship dynamics between entrepreneur and investors When to slow down, ramp up, and scale companies Knowing when to sell a business, keep growing, or shut it down Why startups fail Common entrepreneurial mistakes you can avoid Who this book is for This book is a must-read for entrepreneurs and venture capital/private equity investors. It's also for venture capitalists and entrepreneurs in emerging markets who want to apply to homegrown ventures the Silicon Valley model of building billion-dollar startups. Corporate executives focused on innovation or mergers and acquisitions will find the book's insights priceless. Finally, business students and aspiring entrep
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Venture Funding Secrets
- 21. Copyright VCs At Work Tarang Shah Venture Funding Myths
- 22. Copyright VCs At Work Tarang Shah Funding Model Stage 0 Stage 1 Stage 2 Formation Build & Prove Grow & Scale Extended Team ??? Scalability (Sales, Business Model, Product Core Team Product/ Idea Product-Market Fit Market Cofounding Team Funding Type Seed Super Angel Series A Series B Series C Series D, E, F How Much? $50-500k $500k-2M $3-7M $7-25M $15M+ $25M+ Typical Valuation $1M $3-5M $5-10M $15M+ $50M+ $100M+ Dilution 25-40% 5-10%
- 23. How do VCs think? Entrepreneur Market First First First identify First identify promising promising market Entrepreneur Look for Follow their lead promising team into promising than can execute market opportunity in that market
- 24. However…. Billion Dollar Promising Successful Market Entrepreneur Startup
- 25. Copyright VCs At Work Tarang Shah Anatomy of Successful Entrepreneurs Balanced Ego – Big ego to Real Visionary – Can pursue unconventional ideas Big & Bold Head see the whole company but in-check ego to surround – “The World is beyond current product with people smarter than him Not Enough” ; Big Ears – Listens Not afraid of non- actively and intently to Authenticity – Product view consensus view customers and analytics informed by 10k hours of tinkering; deep experience that Passionate Disinterest – provides insights into the fine Passionate to seek out the nuances of market and customer truth but not biased about the outcome – highly objective Iterative – Not afraid of failures Genuine & Avid Passion to but like Edison enjoys discoveries High Integrity solve the problem and make through methodical trial and – Transparent a difference -> A Missionary errors and Trustworthy Personal Relevance to the Extremely Focused – breaking vision pain point being solved – into short-term metrics and single- motivation beyond making mindedly pursuing it. money
- 26. Copyright VCs At Work Tarang Shah Building World Class Team
- 27. Copyright VCs At Work Tarang Shah Anatomy of Successful Cofounding Team High Complementary Past Successful Proven Potential Skills (e.g. Working Chemistry Cofounding business, tech) Relationship Team
- 28. Copyright VCs At Work Tarang Shah Building World Class Team Lift the quality Hire unfettered Hire for Cultural of team with passion without fit as much as each hire and ego & restrictions functional skills fire of past learning Hire people who Fire promptly and Hire People you can start adding amicably have worked value day 1 – No someone who is with well before time for training not fitting well
- 29. Copyright VCs At Work Tarang Shah Building “A” Team Egoistical, Insecu re & Can’t attract smarter people to join CEO “B” CEO “B” Player hires CFO CTO “C” Players “C” Player hires VP VP VP VP “D” Players “D” Player hires Dir Dir Dir Dir “E” Players Pretty soon you Mgr Mgr Mgr Mgr have “Zombies” in your team
- 30. Copyright VCs At Work Tarang Shah Building “A” Team CEO “A” CEO “A” Player hires CFO CTO “A” Players “A” Player hires VP VP VP VP “A” Players “A” Player hires Dir Dir Dir Dir “A” Players Pretty soon you Mgr Mgr Mgr Mgr have world class Copyright VCs At Work Tarang Shah “A” team
- 31. Copyright VCs At Work Tarang Shah Culture of Success
- 32. Can you identify promising markets? Changing Highly New Supporting Customer Attractive Technology Infrastructure Behavior Market
- 33. Can you identify promising markets? Changing Highly New Supporting Customer Attractive Technology Infrastructure Behavior Market
- 34. So what do you look for? Changing Highly New Supporting Customer Attractive Technology Infrastructure Behavior Market
- 35. Identifying Emerging Platforms ??? Netscape eBay Cisco Amazon Mobile 3Com Apple Internet Microsoft WANs LANs IBM Intel PCs Micro Computers Chips Transistors 1950 1960 1970 1980 1990 2000
- 36. What are some of the Emerging Platforms Today? Smartphone iPad/ Facebook Twitter Tablet PayPal Amazon ??? ???
- 37. Making of New Markets Horse Donkey Mule
- 38. Disrupting Established Markets New New Lean Mean Fat Cats Technology Cat Fat Telcos P2P Sharing Skype Blockbuster Internet Netflix
- 40. Product-Market Fit Copyright VCs At Work Tarang Shah
- 41. Your Three Challenges… Copyright VCs At Work Tarang Shah
- 42. Your Three Challenges… Copyright VCs At Work Tarang Shah
- 43. Your Three Challenges… Copyright VCs At Work Tarang Shah
- 44. R.I.P. (Rapid Iteration & Pivoting) Copyright VCs At Work Tarang Shah
- 45. Copyright VCs At Work Tarang Shah R.I.P. (Rapid Iteration & Pivoting)
- 46. High RPM & Small Turning Radius Copyright VCs At Work Tarang Shah
- 47. Key Considerations Copyright VCs At Work Tarang Shah