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Venture Deals Be Smarter Than Your Lawyer and Venture Capitalist

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ISBN-10: 1118443616

ISBN-13: 9781118443613

Edition: 2nd 2012

Authors: Brad Feld, Dick Costolo, Jason Mendelson

List price: $70.95
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Description:

Venture Capital comes from original material Feld and Mendelson have written about in their blog: ways and strategies that allow entrepreneurs to excel in their start-up companies. They have created a Term Sheet series in 2005 that has been used by many universities and is becoming increasingly popular. The book discusses the history of the Venture Capital Term Sheet and the participants of the process. There is a breakdown analysis of the mechanics of a term sheet and the tactics needed to negotiate. There is also a demonstration of the stages of starting and seeing a venture through from the idea "seed" to the late stage "continual growth."
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Book details

List price: $70.95
Edition: 2nd
Copyright year: 2012
Publisher: John Wiley & Sons, Incorporated
Publication date: 12/17/2012
Binding: Hardcover
Pages: 272
Size: 6.25" wide x 9.25" long x 1.25" tall
Weight: 0.990
Language: English

Foreword
Preface
Acknowledgments
Introduction: The Art of the Term Sheet
The Players
The Entrepreneur
The Venture Capitalist
The Angel Investor
The Syndicate
The Lawyer
The Mentor
How to Raise Money
Do or Do Not; There Is No Try
Determine How Much You Are Raising
Fund-Raising Materials
Due Diligence Materials
Finding the Right VC
Finding a Lead VC
How VCs Decide to Invest
Closing the Deal
Overview of the Term Sheet
The Key Concepts: Economics and Control
Economic Terms of the Term Sheet
Price
Liquidation Preference
Pay-to-Play
Vesting
Employee Pool
Antidilution
Control Terms of the Term Sheet
Board of Directors
Protective Provisions
Drag-Along Agreement
Conversion
Other Terms of the Term Sheet
Dividends
Redemption Rights
Conditions Precedent to Financing
Information Rights
Registration Rights
Right of First Refusal
Voting Rights
Restriction on Sales
Proprietary Information and Inventions Agreement
Co-Sale Agreement
Founders' Activities
Initial Public Offering Shares Purchase
No-Shop Agreement
Indemnification
Assignment
The Capitalization Table
Convertible Debt
Arguments For and Against Convertible Debt
The Discount
Valuation Caps
Interest Rate
Conversion Mechanics
Conversion in a Sale of the Company
Warrants
Other Terms
Early Stage versus Late Stage Dynamics
Can Convertible Debt Be Dangerous?
How Venture Capital Funds Work
Overview of a Typical Structure
How Firms Raise Money
How Venture Capitalists Make Money
How Time Impacts Fund Activity
Reserves
Cash Flow
Cross-Fund Investing
Departing Partners
Fiduciary Duties
Implications for the Entrepreneur
Negotiation Tactics
What Really Matters?
Preparing for the Negotiation
A Brief Introduction to Game Theory
Negotiating in the Game of Financings
Negotiating Styles and Approaches
Collaborative Negotiation versus Walk-Away Threats
Building Leverage and Getting to Yes
Things Not to Do
Great Lawyers versus Bad Lawyers versus No Lawyers
Can You Make a Bad Deal Better?
Raising Money the Right Way
Don't Ask for a Nondisclosure Agreement
Don't Email Carpet Bomb VCs
No Often Means No
Don't Ask for a Referral If You Get a No
Don't Be a Solo Founder
Don't Overemphasize Patents
Issues at Different Financing Stages
Seed Deals
Early Stage
Mid and Late Stages
Other Approaches to Early Stage Deals
Letters of Intent-The Other Term Sheet
Structure of a Deal
Asset Deal versus Stock Deal
Form of Consideration
Assumption of Stock Options
Representations, Warranties, and Indemnification
Escrow
Confidentiality/Nondisclosure Agreement
Employee Matters
Conditions to Close
The No-Shop Clause
Fees, Fees, and More Fees
Registration Rights
Shareholder Representatives
Legal Things Every Entrepreneur Should Know
Intellectual Property
Employment Issues
State of Incorporation
Accredited Investors
Filing an 83(b) Election
Section 409A Valuations
Authors' Note
Sample Term Sheet
Sample Letter of Intent
Additional Resources
Glossary
About the Authors
Index
Excerpt from Startup Communities