Venture Deals: Summary Review
This is a summary review of Venture Deals containing key details about the book.
What is Venture Deals About?
Venture Deals by Brad Feld and Jason Mendelson is a book that provides a comprehensive guide to venture capital, covering the key terms, players, and processes involved in the venture capital industry. The book covers topics such as how venture capital funds work, the negotiation process between entrepreneurs and investors, and the different types of deal structures and terms that are commonly used. The book provides practical advice for entrepreneurs on how to navigate the venture capital landscape, raise funding, and build successful companies. Overall, "Venture Deals" provides a comprehensive guide to navigating the complex world of venture capital and building a successful startup. By understanding the key players, financing options, and negotiation strategies involved in VC deals, entrepreneurs can increase their chances of success and build thriving businesses.
In Venture Deals, the authors and driving force behind the Foundry Group—a venture capital firm focused on investing in early-stage information technology companies—they 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.
Summary Points & Takeaways from Venture Deals
Some key summary points and takeaways from the book include:
* Understand the key players in venture capital (VC) deals: The key players in a VC deal include the entrepreneur, the VC firm, the individual VCs, the lawyers, and the board of directors. Each of these players has their own motivations and interests that must be aligned for a successful deal.
* Know the different types of financing: There are many different types of financing available to startups, including angel financing, seed financing, Series A financing, and more. Each type of financing comes with its own terms and conditions, and it's important to understand the differences.
* Negotiate effectively: Negotiation is a critical part of any VC deal, and it's important to approach negotiations with a clear understanding of what you want to achieve. Be prepared to negotiate on a variety of issues, including valuation, control, and board composition.
* Understand term sheets: Term sheets are the documents that outline the key terms and conditions of a VC deal. It's important to carefully review and understand the term sheet before signing it, as it will have a significant impact on the future of your business.
* Build a strong team: A strong management team is essential for any successful startup. In addition to having the right technical skills, team members should also have complementary personalities and a shared vision for the company.
* Develop a long-term vision: While it's important to focus on short-term goals and milestones, it's also critical to have a long-term vision for your business. This vision should be communicated clearly to all stakeholders, including investors, employees, and customers.
* Be prepared for challenges: Building a successful startup is never easy, and there will be many challenges along the way. It's important to be resilient and adaptable in the face of these challenges, and to have a strong support network to help you through difficult times.
Who is the author of Venture Deals?
Brad Feld is an American entrepreneur, author, blogger, and venture capitalist at Foundry Group in Boulder, Colorado, a firm he started with partners Seth Levine, Ryan McIntyre, and Jason Mendelson. Feld began financing technology startups in the early 1990s, first as an angel and later an institutional investor.
Jason Mendelson is a venture capitalist, startup co-founder, general counsel, and software engineer. Today he is an author, musician (under the name Jace Allen), philanthropist, and is very active in the criminal justice reform ecosystem.
What are good quotes from Venture Deals?
“Failure is a key part of entrepreneurship, but, as with many things in life, attitude impacts outcome”
“as you'll learn, there really are only two key things that matter in the actual term sheet negotiation—economics and control.”
“In either case, before you jump through hoops providing this information, make sure a partner-level person (usually a managing director or general partner) is involved and that you aren’t just the object of a fishing expedition by an associate.”
“There are only a few key things most VCs look at to understand and get excited about a deal: the problem you are solving, the size of the opportunity, the strength of the team, the level of competition or competitive advantage that you have, your plan of attack, and current status. Summary financials, use of proceeds, and milestones are also important. Most good investor presentations can be done in 10 slides or fewer.”
“Outside board members are usually compensated with stock options—just like key employees—and are often invited to invest money in the company alongside the VCs.”
“If you feel like your VC is a proctologist, run for the hills.”
“When we meet people who say they are “trying to raise money,” “testing the waters,” or “exploring different options,” this not only is a turnoff, but also often shows they've not had much success. Start with an attitude of presuming success. If you don’t, investors will smell this uncertainty on you; it'll permeate your words and actions.”
Book details
- Print length: 219 Pages
- Genre: Business, Entrepreneurship, Finance
What are the chapters in Venture Deals?
Chapter 1: The Players
Chapter 2: Preparing for Fundraising
Chapter 3: How to Raise Money
Chapter 4: Overview of the Term Sheet
Chapter 5: Economic Terms of the Term Sheet
Chapter 6: Control Terms of the Term Sheet
Chapter 7: Other Terms of the Term Sheet
Chapter 8: Convertible Debt
Chapter 9: The Capitalization Table
Chapter 10: Crowdfunding
Chapter 11: Venture Debt
Chapter 12: How Venture Capital Funds Work
Chapter 13: Negotiation Tactics
Chapter 14: Raising Money The Right Way.
Chapter 15: Issues at Different Financing Stages
Chapter 16: Letters of Intent: The Other Term Sheet
Chapter 17: How to Engage an Investment Banker
Chapter 18: Why Do Term Sheets Even Exist?
Chapter 19: Legal Things Every Entrepreneur Should Know
What do critics say?
Here's what one of the prominent reviewers had to say about the book: "Long term horizons, coupled with clear analysis in the book, provide a clear understanding and historical perspective into financial crises" — Ad-Hoc-News
* The editor of this summary review made every effort to maintain information accuracy, including any published quotes, chapters, or takeaways. If you're interested in enhancing your personal growth, I suggest checking out my list of favorite self-development books. These books have been instrumental in my own personal development and I'm confident they can help you too.
Chief Editor
Tal Gur is an author, founder, and impact-driven entrepreneur at heart. After trading his daily grind for a life of his own daring design, he spent a decade pursuing 100 major life goals around the globe. His journey and most recent book, The Art of Fully Living, has led him to found Elevate Society.
