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E-raamat: Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist

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  • Formaat: PDF+DRM
  • Ilmumisaeg: 21-Aug-2019
  • Kirjastus: John Wiley & Sons Inc
  • Keel: eng
  • ISBN-13: 9781119594857
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  • Formaat: PDF+DRM
  • Ilmumisaeg: 21-Aug-2019
  • Kirjastus: John Wiley & Sons Inc
  • Keel: eng
  • ISBN-13: 9781119594857

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Help take your startup to the next step with the new and revised edition of the popular book on the VC deal process—from the co-founders of the Foundry Group

How do venture capital deals come together? This is one of the most frequent questions asked by each generation of new entrepreneurs. Surprisingly, there is little reliable information on the subject. No one understands this better than Brad Feld and Jason Mendelson. The founders and driving force behind the Foundry Group—a venture capital firm focused on investing in early-stage information technology companies—Brad and Jason have been involved in hundreds of venture capital financings. Their investments range from small startups to large Series A venture financing rounds. The new edition of Venture Deals continues to show fledgling entrepreneurs the inner-workings of the VC process, from the venture capital term sheet and effective negotiating strategies to the initial seed and the later stages of development.

Fully updated to reflect the intricacies of startups and entrepreneurship in today's dynamic economic environment, this new edition includes revisions and updates to coverage on negotiating, gender issues, ICO’s, and economic terms. New chapters examine legal and procedural considerations relevant to fundraising, bank debt, equity and convertible debt, how to hire an investment banker to sell a company, and more.

  • Provides valuable, real-world insights into venture capital structure and strategy
  • Explains and clarifies the VC term sheet and other misunderstood aspects of capital funding
  • Helps to build collaborative and supportive relationships between entrepreneurs and investors
  • Draws from the author’s years of practical experience in the VC arena
  • Includes extensively revised and updated content throughout to increase readability and currency

Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist is a must-have resource for Any aspiring entrepreneur, venture capitalist, or lawyer involved in VC deals as well as students and instructors in related areas of study.

Foreword xi
Fred Wilson
Foreword xiii
James Park
Foreword xv
Dick Costolo
Preface xvii
Acknowledgments xxiii
Introduction: The Art of the Term Sheet 1(2)
Chapter 1 The Players 3(14)
The Entrepreneur
3(1)
The Venture Capitalist
4(3)
Financing Round Nomenclature
7(2)
Types of Venture Capital Firms
9(1)
The Angel Investor
10(2)
The Syndicate
12(1)
The Lawyer
13(1)
The Accountant
14(1)
The Banker
15(1)
The Mentor
15(2)
Chapter 2 Preparing for Fundraising 17(6)
Choosing the Right Lawyer
17(1)
Proactive versus Reactive
18(2)
Intellectual Property
20(3)
Chapter 3 How to Raise Money 23(18)
"Do. Or Do Not. There Is No Try."
23(1)
Determine How Much You Are Raising
24(2)
Fundraising Materials
26(6)
Due Diligence Materials
32(1)
Finding the Right VC
33(1)
Finding a Lead VC
34(1)
How VCs Decide to Invest
35(3)
Using Multiple VCs to Create Competition
38(1)
Closing the Deal
39(2)
Chapter 4 Overview of the Term Sheet 41(4)
The Key Concepts: Economics and Control
42(3)
Chapter 5 Economic Terms of the Term Sheet 45(32)
Valuation and Price
45(2)
Employee Option Pool
47(3)
Warrants
50(2)
How Valuation Is Determined
52(2)
Liquidation Preference
54(9)
Pay-to-Play
63(3)
Vesting
66(4)
Exercise Period
70(1)
Antidilution
71(6)
Chapter 6 Control Terms of the Term Sheet 77(14)
Board of Directors
77(4)
Protective Provisions
81(4)
Drag-Along Agreement
85(3)
Conversion
88(3)
Chapter 7 Other Terms of the Term Sheet 91(22)
Dividends
91(2)
Redemption Rights
93(2)
Conditions Precedent to Financing
95(2)
Information Rights
97(1)
Registration Rights
98(2)
Right of First Refusal
100(2)
Voting Rights
102(1)
Restriction on Sales
102(1)
Proprietary Information and Inventions Agreement
103(1)
Co-Sale Agreement
104(1)
Founders' Activities
105(1)
Initial Public Offering Shares Purchase
106(1)
No-Shop Agreement
107(3)
Indemnification
110(1)
Assignment
110(3)
Chapter 8 Convertible Debt 113(16)
Arguments for and Against Convertible Debt
114(2)
The Discount
116(1)
Valuation Caps
117(2)
Interest Rate
119(1)
Conversion Mechanics
119(2)
Conversion in a Sale of the Company
121(1)
Warrants
122(3)
Other Terms
125(1)
Early Stage versus Late Stage Dynamics
125(1)
Can Convertible Debt Be Dangerous?
126(1)
An Alternative to Convertible Debt
127(2)
Chapter 9 The Capitalization Table 129(8)
Price per Share with Convertible Notes
131(1)
Pre-Money Method
132(1)
Percentage-Ownership Method
133(1)
Dollars-Invested Method
133(4)
Chapter 10 Crowdfunding 137(8)
Product Crowdfunding
137(2)
Equity Crowdfunding
139(2)
How Equity Crowdfunding Differs
141(2)
Token Crowdfunding
143(2)
Chapter 11 Venture Debt 145(22)
The Role of Debt versus Equity
145(2)
The Players
147(1)
How Lenders Think about Loan Types
148(3)
Economic Terms
151(3)
Amortization Terms
154(3)
Control Terms
157(4)
Negotiation Tactics
161(2)
Restructuring the Deal
163(4)
Chapter 12 How Venture Capital Funds Work 167(20)
Overview of a Typical Structure
168(1)
How Firms Raise Money
169(2)
How Venture Capitalists Make Money
171(4)
How Time Impacts Fund Activity
175(2)
Reserves
177(2)
Cash Flow
179(1)
Cross-Fund Investing
179(2)
Departing Partners
181(1)
Corporate Venture Capital
181(2)
Strategic Investors
183(1)
Fiduciary Duties
184(1)
Implications for the Entrepreneur
185(2)
Chapter 13 Negotiation Tactics 187(22)
What Really Matters?
187(1)
Preparing for the Negotiation
188(3)
A Brief Introduction to Game Theory
191(2)
Negotiating in the Game of Financings
193(1)
Negotiating Other Games
194(1)
Negotiating Styles and Approaches
195(4)
Collaborative Negotiation versus Walk-Away Threats
199(1)
Building Leverage and Getting to Yes
200(3)
Things Not to Do
203(2)
Great Lawyers versus Bad Lawyers versus No Lawyers
205(1)
Can You Make a Bad Deal Better?
206(3)
Chapter 14 Raising Money the Right Way 209(6)
Don't Be a Machine
209(1)
Don't Ask for a Nondisclosure Agreement
210(1)
Don't Email Carpet-Bomb VCs
210(1)
No Often Means No
211(1)
Don't Ask for a Referral If You Get a No
211(1)
Don't Be a Solo Founder
212(1)
Don't Overemphasize Patents
213(1)
Don't Be Silent If You Witness Bad Behavior
213(2)
Chapter 15 Issues at Different Financing Stages 215(6)
Seed Deals
215(1)
Early Stage
216(1)
Mid and Late Stages
217(4)
Chapter 16 Letters of Intent: The Other Term Sheet 221(22)
Structure of a Deal
222(3)
Asset Deal versus Stock Deal
225(2)
Form of Consideration
227(1)
Assumption of Stock Options
228(4)
Representations, Warranties, and Indemnification
232(1)
Escrow
233(2)
Confidentiality/Nondisclosure Agreement
235(1)
Employee Matters
236(1)
Conditions to Close
237(1)
The No-Shop Clause
238(1)
Fees, Fees, and More Fees
239(1)
Registration Rights
240(1)
Shareholder Representatives
241(2)
Chapter 17 How to Engage an Investment Banker 243(10)
Why Hire an Investment Banker?
243(2)
How to Choose an M&A Adviser
245(2)
Negotiating the Engagement Letter
247(4)
Helping Your Banker Maximize the Outcome
251(2)
Chapter 18 Why Do Term Sheets Even Exist? 253(6)
Constraining Behavior and the Alignment of Incentives
254(1)
Transaction Costs
255(1)
Agency Costs and Information Asymmetry
256(1)
Reputation Constraints
257(2)
Chapter 19 Legal Things Every Entrepreneur Should Know 259(14)
Intellectual Property
259(2)
Patents
261(1)
Trademarks
262(1)
Employment Issues
263(1)
Type of Corporate Structure
264(1)
Accredited Investors
265(1)
Section 409A Valuations
266(1)
(83)b Elections
267(1)
Founders' Stock
268(1)
Consultants versus Employees
269(1)
Compensating Service Providers
270(3)
Authors' Note 273(2)
Appendix A: Sample Term Sheet 275(10)
Appendix B: Foundry Group Term Sheet 285(10)
Appendix C: Sample Letter of Intent 295(8)
Appendix D: Additional Resources 303(4)
Glossary 307(14)
About the Authors 321(2)
Index 323(10)
Excerpt from Startup Communities 333
BRAD FELD has been an early stage investor and entrepreneur for over thirty years. Prior to cofounding Foundry Group, he cofounded Mobius Venture Capital and Intensity Ventures. He is also a cofounder of Techstars.

JASON MENDELSON has over twenty years experience in the venture capital and technology industries in a multitude of investing, legal, and operational roles. Prior to cofounding Foundry Group, Jason was a Managing Director and General Counsel for Mobius Venture Capital. He is also a cofounder of SRS/Acquiom.