Venture Hacks

In 4 Things to Do After You Get Your First Term Sheet, Bill Burnham, a former partner at Mobius and Softbank Capital, writes,
“I’ve recently been involved in helping a couple companies with their first major round of VC financing. It’s actually been pretty interesting for me because I have historically been on the [...]

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“We took the approach of wanting to get to know the different partners and the different possibilities and to see where there was the best fit. Partnerships take a lot of work—you want to go out on a few dates before you get married. Yes, we dated a few people but didn’t get married… and [...]

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“Once the term sheet is signed, the power shifts away from the startup to the purchaser. The typical term sheet will give the purchaser the discretion to step away from the deal if due diligence is unsatisfactory, or if the necessary internal approvals are not obtained.”
— Suzanne Dingwall Williams, on M&A
“… there is a wide [...]

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Q: What’s the biggest mistake entrepreneurs make when they’re raising money?
Entrepreneurs focus on valuation when they should be focusing on controlling the company through board control and limited protective provisions.
Valuation is temporary, control is forever. For example, the valuation of your company is irrelevant if the board terminates you and you lose your unvested stock.
The [...]

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How many similarities can you find between hacking fund-raising and hacking a car purchase? Watch this video:
The best answer gets a coveted Venture Hacks mug.
(Via Lifehacker.)

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“Things are worth what people pay for them.”
– Head of M&A at a Fortune 500 Company
Summary: You need strong alternatives to hack a term sheet. Create alternatives with focus: pitch and negotiate with all your prospective investors at once. Focus compounds scarcity and social proof, which closes deals. Focus also yields a quick yes or [...]

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Summary: Angels make more introductions than VCs because angels need co-investors. You can’t clear the market in series–you can only clear it in parallel. Tranches are dumb–they have zero upside and catastrophic downside. Two investors aren’t always better than one. Finally, a ‘very special’ message to graduating Y Combinator founders: don’t do deals on D-Day [...]

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“You cannot clear the market in series.”
– Office Hours
“Investors move in herds that are steered by scarcity and social proof.”
– Office Hours
Summary: This article includes audio and notes from our first office hours. Topics include selling 51% of the company, dead equity, and setting good terms with angels.
Yesterday, we held our first office hours via [...]

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