Fundraising

What Is The Appropriate Time Horizon Of A Financial Model for VC’s?

Q: When building a financial projection model for a pitch to VC’s, should you include future rounds of funding in the model or simply show what measurable goal you are trying to achieve with the current round you are seeking? A (Brad): It depends on the stage of the company. But first, it’s important to understand…

Who Are Stock Certificates Issued To and When?

Q: We are a Delaware C Corp registered as a Foreign Entity in Colorado our home state and we need to figure out the answers to the following questions with regards to stock certificates. 1. Who gets stock certificates issued and when?              My assumptions are that cash investments DO get certificates,…

What Costs Are Considered Reimbursable To The Founders Of A Startup Company?

Q: What costs are considered reimbursable to the founder of a start-up company?  More specifically, if the founder has been boot-strapping his company since inception, and he agrees to a series a term sheet with a VC firm, are the operational costs incurred by the founder between this time and the closing of the round…

Are VCs Interested in Funding a Services Agency?

Question: I have a startup concept for a services agency (not a software or online business). I have previously helped launch PR agencies, one of which was subsequently acquired by a national agency. Are there angels/VCs that would be interested in my services concept? Typically not. While there are some VCs that like services businesses,…

Brisbourne: The Math Behind Anti-Dilution (With Examples)

Well – I fell off that particular horse. That would be the “I’ll blog daily about the best VC blog post of the past 24 hours.” I could make some snarky comment about how there weren’t any for the last few weeks, but that wouldn’t be true. I just fell of the horse. But yesterday,…

Do You Need To Be A Corporation To Raise VC 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…

If An Entrepreneur Has Children, Does It Impact Funding Decisions?

Question: What is your take on entrepreneurs who have young children or otherwise active family lives?  Is this a factor in funding decisions?  I try to live with a family-first mentality but find it hard to compete with young unattached entrepreneurs who can put startup-first. My answer is simple – this shouldn’t be a factor…

Wilson: Pricing A Follow-On Venture Investment

It’s Monday and that means – yup – that Fred Wilson (USV) once again claims the VC Post of the Day due to his excellent MBA Mondays series titled Pricing A Follow-On Venture Investment. In it, Fred walks through an example, with real numbers, of how USV thinks about valuing an inside-led round for a…

When Financings Fall Apart

Rand Fishkin, the CEO & co-founder of SEOmoz, has an long, thorough, and incredibly detailed blog post up about The $24 Million Moz Almost Raised. Rand does an awesome job of providing extensive details while maintaining confidentiality of the participants. The story covers the full lifecycle of the VC fundraising process, beginning with Rand and his…

Model Cap Tables With VCHub

A few days ago I answered a question on AsktheVC about modeling cap tables. After a quick email conversation with Jeff Boardman (founder of LearnVC), I realize I had left his product off the list. Jeff has done a nice job building a site that both models a cap table and provides a lot of…