Venture Hacks

Here are the latest great comments from our readers—please keep ’em coming!

Rob Lord, founder of Songbird (Sequoia Capital), has some ideas for VC Wear t-shirts:

“Mo’ money, mo’ board seats.
“409a a-okay!
“Some of my best friends are EIRs.
“Venture debt is a non-starter.”

Jonathan Boutelle, founder of SlideShare, suggests using SlideShare to share decks privately:

“One safe way to share a PowerPoint deck with potential investors: upload it to SlideShare as private. Share it only with the investor. After 48 hours (or whenever they’ve had time to check out the presentation) simply remove it from slideshare.

“You could also share via a “secret” URL: but that URL could potentially be forwarded to other parties so it’s not a good way to share files with people you don’t trust (which seems to be the challenge we’re speaking of here). Still, you could take the file down after 48 hours, and this approach wouldn’t require the other party to have a login on slideshare. So it might be the more practical option.”

Nabeel Hyatt, founder of Conduit Labs (Charles River Ventures), says you shouldn’t send your deck to investors:

“Not worth it. Not because your deck has some amazing information, it probably is pretty high level and isn’t as unique as you wish it was, but because it kills the point of the presentation. What if Steve Jobs posted his Keynote presentation the day before Macworld and then gave his presentation the next day — how much harder would it be for him to get any sense of drama, intrigue, and frankly keep people awake?

“You should send them *something* to entice their interest, but whatever it is, expect it to be widely circulated, and think of it as just a teaser to get the meeting. You should be the main event, not your PDF.”

Ted Rheingold, founder of Dogster (Michael Parekh), has some ideas for protecting your deck:

“Don’t forget to convert it to PDF or another read-only format to avoid any funny stuff once it has left your hands.

“And make sure the date is the day or month you sent it, as it then stands as a point-in-time snapshot which is likely out-of-date by the next quarter (in case the slides end up floating around inboxes month later)

“I like the idea of posting the recipients name on each page so it’s clear who leaked it if they do want to pass along.

“I also thinking striping out any slides you think reveal too much is a good compromise. (Ask a trusted person to be the judge of what is too revealing, company founders tend to over value their own IP)”

Yokum Taku, a partner at Wilson Sonsini, disagrees with us on capping legal fees:

“The statement “Most caps include the fees for both sides” is not accurate. Term sheets typically only say that the company will pay reasonable legal fees of investors’ counsel, capped at $X. (I also disagree with $10K – $20K as a reasonable cap to propose with straight face for investor counsel.) Of course, you can try to discuss a fee cap with company counsel, but almost all competent counsel will not agree to a cap. However, most experienced counsel can provide estimates based on actual data from previous similar transactions. Companies often have neglected corporate cleanup that needs to be fixed in connection with a financing (similar to not going to the dentist for years and paying the price later). In addition, there are always things that occur in financings that are difficult to predict (such as arguments among founders). Finally, capping company counsel fees is a disincentive to provide services after the cap is exceeded.”

Farbood Nivi, founder of Grockit (Benchmark Capital), thinks raising a good chunk of money is not a bad thing:

“There is an argument that says too much money can cause one to take the foot off the gas.

“I can’t say it’s a false statement. I can say it doesn’t make sense to me or apply in Grockit’s situation. Raising the Series A we did, as opposed to a few hundred K seed round, has given us an engine with a lot more horsepower. That knowledge, if anything, should keep your foot feeling like lead. That said, keep in mind, a more powerful car requires more adept steering, braking and maintenance.

“Money well spent buys time (far more precious than money), quality (translate: scalability and user satisfaction), people (translate: your company), access, resources. Do you need any of these?

“Money is to a business what oxygen is to a human…

“All founders are desperate. The question is what for.

“I would rather be able to pursue my desperate need to create the ass-kickinest app I can over my desperate need to generate revenue for it.

“Money allows you to reduce revenue based desperation and replace it with product building desperation.”

Like we says, keep the comments coming—we’ll highlight the best ones in the next ‘comment’ post.