Venture Hacks

This is the first in an ongoing series called Books for Entrepreneurs. We’ll use these posts to recommend books that we’ve found useful as entrepreneurs (duh).
Our first book is Bargaining for Advantage by G. Richard Shell. Richard is a professor at Wharton and this is my favorite negotiation book period. It synthesizes the principled negotiation [...]

[Read more →]

“Trust, but verify.”
– Ronald Reagan
Summary: Investors trust the entrepreneurs they back. But they verify their expectations with contracts and control. You should do the same—with the same tools investors use: contracts and control.
Why do investors want to control their investments through board seats and protective provisions? Shouldn’t they just give entrepreneurs bags of money and [...]

[Read more →]

Summary: Here are 2 more microhacks for finding a lead investor: (4) Incent followers to lead by telling them the truth: there probably won’t be room in the round for followers. (5) The best way to find a lead is to build something that attracts a lead: keep building your company and reducing risk.
In parts [...]

[Read more →]

Summary: Here are 3 microhacks for finding a lead investor: (1) If followers have good reasons to not lead, ask them for introductions to potential leads. (2) If you’re early stage, find seed investors who invest in people and high risk startups. (3) If every prospective investor says “we don’t know the market,” find investors [...]

[Read more →]

“Those kind of ‘sit on the sideline’ investors are worthless to you if you want to get a financing done… if you are raising a financing of any kind, spend all of your time looking for a lead investor.”
— Fred Wilson, Union Square Ventures
Summary: Financings happen when you find a lead investor, negotiate a term [...]

[Read more →]

Q: Should I raise money from VCs or angels, all things being equal?
There is no prototypical VC or angel. Instead of pitting VCs versus angels, consider their perceived pros and cons and choose the best available investor.
Angels are perceived to have less money, invest for fun, make their investment decisions quickly, and not ask for [...]

[Read more →]

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 [...]

[Read more →]

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.)

[Read more →]

As this nuclear winter of venture hacks continues, I thought you might enjoy our thoughts on Paul Graham’s The Equity Equation. Paul says,
“Whenever you’re trading stock in your company for anything, whether it’s money or an employee or a deal with another company, the test for whether to do it is the same. You should [...]

[Read more →]

Dharmesh Shah recently wrote a very nice review of Venture Hacks. The article includes great meta-advice about fund raising:
“1. VC Negotiation Is An Art Form: As an entrepreneur, there are few things more “nuanced” that you’ll deal with than raising institutional capital. Even if you decide not to raise [...]

[Read more →]