Archive for the ‘Fundraising’ Category

Spreadsheets To Model Cap Tables

Question: One thing that I think would be incredibly helpful would be to have a spreadsheet showing how a cap sheet evolves under a set of financing rounds with the important variables parameterized so we can play with them.

Having spent the past 15 years trying to come up with the definitive spreadsheet model for all cases, we’ve given up. It’s really hard to create the general case and actually using it is very difficult. So we don’t have a generic one to offer.

However, there are plenty of resources for cap tables on the web. Here are some examples. Use at your own risk – we can’t guarantee the mathematical integrity of any of these.

There are many others on the web – just search around for “cap table” or “capitalization table”. I expect your favorite lawyer has one also – if he doesn’t, or won’t share it with you, I encourage you to find a new favorite lawyer.

Why Don’t Venture Capitalists Tell You Why They Won’t Invest?

Today, we were asked the following question:

‘”Why don’t VCs tell you the reason why they don’t invest? Any feedback would be useful. It’s just plain rude.”

I (Jason) figured that this is really a personal question, so I thought that I’d post on my personal blog, as I certainly can’t speak (or even guess) the response for the entire VC industry.

You can see Jason’s thoughts here

Communications Advice for Pitching Venture Capitalists

Today’s post is from Matt Eventoff – a communications consultant who has good tips for entrepreneurs who are pitching VCs.

I reinforce that having a clear message is really important.  If you get off on the wrong foot in a presentation and can’t clearly definite your value proposition, you risk losing the interest of the VC and never getting it back. 

Ask the VC Live – University of Michigan

I (Jason) will be visiting the University of Michigan in a couple of weeks to speak to different campus constituencies about entrepreneurship and venture capital.

As part of that, I’m going to plant my butt in a conference room on campus for a couple of hours and talk to anyone that wants to come by and chat, pitch me, talk about venture capital, etc.

Location:  Lorch Hall (Economics Building) Room 171, 611 Tappan, Ann Arbor

Time: 3pm to 5pm

Date: Friday, April 3rd, 2009

Students, professors, members of the community all invited.

What Do Venture Capitalists Think About Young Entrepreneurs?

Q: With a number of great companies being born of ideas coming from a youthful group of entrepreneurs, how are investors reacting to twenty-somethings fresh out of college, with little to no professional experience, without a strong network of seasoned industry experience and with a inconceivable amount of life learning still ahead of them?

Assuming all else is favorable in an investors eyes, what are investors weary of and how can young entrepreneurs prepare for this? In addition, what advice to you have for the young person seeking to build a team of "time-tested, battle-hardened" professionals?

A: (Jason)  We think young-entrepreneurs are great.  In fact, we like spending time with the younger set so much that we are active mentors and investors with Techstars.  And certainly with our fund, we wouldn’t hesitate to fund a first-time entrepreneur with a great idea. 

I think the key to being a young entrepreneur is being self aware.  Know what you know and also know what you don’t.  If you can communicate to a prospective investor that you are smart, have a great idea AND are emotionally intelligent and realize what other skills sets you’ll need to surround yourself with, then I don’t think being young and / or inexperienced will hurt your chances.  In fact, youthful exuberance is infectious and sometimes younger folks will think outside the box more often than older ones who are set in their ways. 

What we are weary about would be the young / first-time team that thinks they "know everything."  I’ve seen this from time-to-time and it’s an immediate turnoff.  One can still be confident and driven and self aware.  No good and experienced VC would expect a twenty-year old to know everything and be prepared for anything that can happen in a startup company, so don’t pretend that you do.  Even after all of our years, we still haven’t seen "everything."

The key is putting a good team around you, or asking your funding partner for help and advice in building a team.  Make sure that you have this discussion BEFORE you commit to an investor, as you don’t want an after-investment surprise.

Most VCs have great networks of executives and can help place particular skill sets into their companies.  Otherwise, you can put together a team before taking on funding and to attract the "veteran" players, you’ll have to have a compelling idea and a mature set of twenty-somethings (in your case).

Good luck to you.   

Crash Course Video

Thanks to my friends at Kendall Media Group, here is the video of my recent Venture Capital Crash Course at the Silicon Flatirons. 

I give a 25 minute presentation and then hold an hour town-hall question and answer session.  Great questions were asked, so if you are interested in what goes through a VC’s head, take a gander.

The video is really well done.  The slides are integrated into the presentation.  I’d highly recommend Craig Kendall if you need any video creation or editing work.  Thanks Craig for putting all the time into the video.  Here’s a bit about Craig:

Founded on 13 years web and video experience and a passion for top quality video, Craig Kendall is the founder of Kendall Media Group and eventon.tv. Currently partnering with many Boulder area technology programs including IgniteBoulder, the Boulder Denver New Tech Meetup, and Silicon Flatiron’s Crash Course for Entrepreneurs, eventon.tv is helping provide video recording and production for the web. Having recently returned to Colorado after 13 years in Tennessee, Craig is thrilled to be part of the technology community in Colorado."There’s some really amazing things happening in the Boulder/Denver area as far as technology and entrepreneurship and Kendall Media Group is excited to be a part of it," says Craig. Reach out to Craig at craig at kendallmediagroup dot com.

Crash Course on Venture Capital

I’ve received some requests to see the materials from the presentation last week. Video should be arriving at a later date, but for now, here are the slides.

Ask the VC Live (Update) and Start Up Drinks

As previous posted, I’m presenting at the University of Colorado a 1.5 hour "crash course" lecture on the VC industry.

There are two updates:

1. The program is February 24th (not 25th, as originally posted) at 5:15 at the CU law school.  You can find more information here

2. Several folks are getting together and re-creating "Boulder Start-up Drinks" after my presentation.  This was a good event that I was sorry to see fade away, so I’m glad that it’s found new life. 

I am still working on getting the presentation recorded in some fashion, as there has been a fair deal of interest.

Ask the VC Live (Update) and Start Up Drinks

As previous posted, I’m presenting at the University of Colorado a 1.5 hour "crash course" lecture on the VC industry.

There are two updates:

1. The program is February 24th (not 25th, as originally posted) at 5:15 at the CU law school.  You can find more information here

2. Several folks are getting together and re-creating "Boulder Start-up Drinks" after my presentation.  This was a good event that I was sorry to see fade away, so I’m glad that it’s found new life. 

I am still working on getting the presentation recorded in some fashion, as there has been a fair deal of interest.

Model Seed Documents – Direct From Techstars

Today, our friends at Techstars posted their model forms of seed financing documents.

Techstars worked with Brad, myself and very closely with Cooley Godward Kronish, LLP (and specifically Mike Platt) to put together a set of “Model Seed Funding Documents” that anyone can use.

There are five primary documents in the set:

Of course, these are just example documents so all legal disclaimers about usage apply (e.g. “do with them what you want, but we take no responsibility for your actions.”)  That said, I think these are a great starting point for anyone doing an early stage financing.