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  1. Articles from Ask The VC

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    1. Do My Early Stage Investors Own Too Much Of The Company?

      Explore Ask The VC (Apr 27 2012) Funding

      Question: Most VCs commented that they can not fund current cap table where the CEO and COO would get 10% equity once fully vested while the current investors have 80%. We talked to our investors and they have agreed to rework the cap table, however, I would like to understand from you what should I [...] (Read Full Article)

      Mentions:   India

    2. How Do I Protect My Option Grant From A Down Round In The Future?

      Explore Ask The VC (Apr 2 2012) Funding

      Question: I am considering joining a startup that is currently in the process of raising their next round of funding. I will be joining as a VP, reporting directly to the CEO, and considered an “executive”. Given the environment for this particular industry, it is very likely that the company will face a down round [...] (Read Full Article)

    3. What Does A Vc Mean When He Says Your Product Is “A Feature And Not A Company”?

      Explore Ask The VC (Jan 7 2012) Funding

      Question: What does a VC mean when he says your product is “a feature and not a company”? This (usually) means that the VC believes the opportunity you are pursuing isn’t a big enough opportunity for them to invest in.  In other words, what you are building should be a feature to something else already [...] (Read Full Article)

    4. Suster: Why You Should Ban Laptops & iPads at Board Meetings

      Explore Ask The VC (Nov 1 2011)

      Mark Suster (GRP) reminds all of us to check our laptops, iPhones, Blackberries, and other electronic devices at the door at board meetings. CEOs should enforce this, as should the other VCs and board members in the room. No “full partial attention” – just full attention.         (Read Full Article)

      Mentions:   Mark Suster

    5. Wilson: What’s The Difference Between A Cto And A Vp Engineering?

      Explore Ask The VC (Oct 31 2011)

      Today’s VC Post of the Day is from Fred Wilson (Union Square Ventures) titled VP Engineering Vs CTO. This is a topic near and dear to our hearts, especially since I (Brad) have been a CTO but never been a VP Engineering (nor would I ever want to be one – I’d suck at that.) I’ve [...] (Read Full Article)

      Mentions:   Fred Wilson   Google

    6. Convertible Debt – Valuation Caps

      Explore Ask The VC (Sep 20 2011) Funding

      Today, in our series on convertible debt, we examine the conversion valuation cap. The cap is an investor-favorable term that puts a ceiling on the conversion price of the debt. The valuation cap is typically only seen in seed rounds where the investors are concerned that the next round of financing will be at a [...] (Read Full Article)

    7. Convertible Debt – The Discount

      Explore Ask The VC (Sep 15 2011)

      As we start our convertible debt series, we’ll focus on the discount. Remember that a convertible debt deal doesn’t purchase equity in your company. Instead, it’s simply a loan that has the ability to convert to equity based on some future financing event (we’ll tackle the conversion mechanics in a later post.) Until recently, we [...] (Read Full Article)

    8. Do You Need To Be A Corporation To Raise VC Funding?

      Explore Ask The VC (Sep 8 2011) Funding

      Question: Does one need to switch an LLC to a corporation to raise VC funding? Would you recommend starting out as a corporation pre-money or as an LLC? The short answer is yes, you have to be a corporation to raise VC funding VCs will want you to be a C-Corp for a few specific [...] (Read Full Article)

    9. What Should You Do When An Investor Asks You For A Business Plan?

      Explore Ask The VC (Sep 7 2011)

      Dan Shapiro has an excellent post up titled What to do when an investor asks you for your business plan. In it he addresses something we missed in Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist. In the section where we discuss business plans, we say: “We haven’t read a business plan in [...] (Read Full Article)

      Mentions:   Dan Shapiro

    10. Checklist For Launching A Startup

      Explore Ask The VC (Aug 26 2011) Marketing

      I ran across a dynamite set of posts for anyone launching a startup. It’s summarized at If I Launched A Startup and includes stuff on incorporation, founders stock, vesting, NDAs, and some other useful things. If you are launching a startup, go check it out. (Read Full Article)

    11. Suster: What Startups Can Learn About PR and Crisis Management

      Explore Ask The VC (Aug 15 2011)

      Mark Suster (GRP) has today’s VC post of the day titled What Startups Can Learn About PR and Crisis Management. As with many of Mark’s posts, it’s an excellent piece of long form writing that thoroughly dissects the issue of crisis management and makes a number of very significant recommendations which are summarized below. If [...] (Read Full Article)

      Mentions:   Mark Suster

    12. Go: Should You Meet With VC’s Early for Feedback?

      Explore Ask The VC (Aug 12 2011) Funding

      Rob Go (NextView Ventures) has the VC post of the day titled Should You Meet With VC’s Early for Feedback? He adds additional perspective to the posts I highlighted last week from Allen Morgan and Mark Suster about meeting with VCs before you are ready to formally pitch them. The VC blogging was pretty thin pickings this [...] (Read Full Article)

      Mentions:   Mark Suster   NextView Ventures

    13. Venture Deals: Chapter 13: Legal Things Every Entrepreneur Should Know

      Explore Ask The VC (Aug 10 2011) Legal

      There are a few legal issues that we’ve seen consistently become hurdles for entrepreneurs and their lawyers. While in some cases they will simply be a hassle to clean up in a financing or an exit, they often have meaningful financial implications for the company and, in the worst case, can seriously damage the value [...] (Read Full Article)

    14. Venture Deals: Chapter 12: Letters of Intent—The Other Term Sheet

      Explore Ask The VC (Aug 9 2011)

      There is another type of term sheet that is important in an entrepreneur’s life—the letter of intent (LOI). Hopefully, one day you’ll receive one from a potential acquirer that will lead to fame, riches, and happiness. Or at least you’ll get a new business card on heavier card stock. Typically the first formal step by [...] (Read Full Article)

    15. Venture Deals: Chapter 10: Raising Money the Right Way

      Explore Ask The VC (Aug 7 2011) Funding

      While most people ask themselves “What should I do?” when seeking VC financing, there are also some things that a person should not do. Doing any of the following at best makes you look like a rookie (which is okay, we all were rookies once) and at worst kills any chance that you have of [...] (Read Full Article)

    16. Venture Deals: Chapter 9: Negotiation Tactics

      Explore Ask The VC (Aug 6 2011) Legal

      Regardless of how much you know about term sheets, you still need to be able to negotiate a good deal. We’ve found that most people, including many lawyers, are weak negotiators. Fortunately for our portfolio company executives, they can read about everything we know online and in this book, so hopefully in addition to being [...] (Read Full Article)

    17. Venture Deals: Chapter 8: How Venture Capital Funds Work

      Explore Ask The VC (Aug 5 2011) Funding

      Before we talk about the dynamics of the negotiation of the deal, it’s useful to understand the motivation of the person you’ll be negotiating against, namely the venture capitalist (VC). We’ve been asked many times to divulge the deep, dark secrets of what makes VCs tick. One night over dinner we talked through much of [...] (Read Full Article)

    18. Dale: All The Bad Things VCs Want To Do To You!

      Explore Ask The VC (Aug 5 2011) Funding

      Dale: All The Bad Things VCs Want To Do To You! Today’s VC Post of the Day is from Richard Dale (Sigma Partners) titled All the Bad Things VCs want to do to You! I don’t think this particular post needs much of an explanation. (Read Full Article)

      Mentions:   Brad Feld   Foundry Group   Jason Mendelson

    19. Wegner: If You Need To Raise Money, Get Your Financing Done ASAP

      Explore Ask The VC (Aug 4 2011) Funding

      Albert Wegner (Union Square Ventures) has today’s VC Post of the day titled If You Need To Raise Money, Get Your Financing Done ASAP. In it, Albert expresses his belief that given the current macro economic environment, companies should focus on getting their money raised quickly – as in right now. He’s conveying global / macro [...] (Read Full Article)

    20. Venture Deals: Chapter 7: The Capitalization Table

      Explore Ask The VC (Aug 3 2011) Funding

      Now is your chance to show off their proficiency with a spreadsheet. Even if you know what a cap table is, we’ll give you a simple way to calculate the summary level ownership categories with a calculator (or a simple spreadsheet model).  Now that we’ve worked through all of the specific clauses in the term [...] (Read Full Article)

    21. Sabet: Always Be Recruiting

      Explore Ask The VC (Aug 3 2011) Recruiting

      Bijan Sabet (Spark Capital) has the VC Post of the Day with Always be Recruiting. The best CEO’s I know are always recruiting, completely obsessed with building the best possible team, and tireless about meeting great new people that might some day be a fit for their company. As a bookend to this, Eric Friedman [...] (Read Full Article)

      Mentions:   Chris Dixon   Boulder   Bijan Sabet

    22. Venture Deals: Chapter 6: Other Terms of the Term Sheet

      Explore Ask The VC (Aug 2 2011)

      In this chapter we cover the non-economic and non-control terms in the term sheet. Some matter, some don’t, and context matters a lot. Hopefully we’ll give you plenty of it to use in your negotiation with your venture capitalist. Up to this point we’ve been exploring terms that matter a lot and fall under the [...] (Read Full Article)

    23. Venture Deals: Chapter 5: Control Terms of the Term Sheet

      Explore Ask The VC (Aug 1 2011) Funding

      Yup – many VCs are control freaks. And they love control terms. In this chapter we tell you which ones matter, why they matter, and what you should pay attention to. We also give you some advice on what is worth negotiating hard for, as well as what you shouldn’t worry about too much. The [...] (Read Full Article)

      Mentions:   Matt Blumberg

    24. Morgan: Why Entrepreneurs Should Never Meet VC’s Unless They’re Formally Pitching

      Explore Ask The VC (Aug 1 2011) Funding

      Today’s VC Post of the Day is from Allen Morgan (Idealab, Mayfield) and is titled Why Entrepreneurs Should Never Meet VC’s Unless They’re Formally Pitching. In it, Allen explains – well – why entrepreneurs should never meet VCs unless they’re formally pitching. It stands out in direct contrast to a recent post from Mark Suster titled [...] (Read Full Article)

      Mentions:   Mark Suster   Foundry Group