{"product_id":"venture-deals-isbn-9781119594826","title":"Venture Deals","description":"\u003cp\u003e\u003cb\u003eHelp take your startup to the next step with the new and revised edition of the popular book on the VC deal process—from the co-founders of the Foundry Group\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eHow do venture capital deals come together? This is one of the most frequent questions asked by each generation of new entrepreneurs. Surprisingly, there is little reliable information on the subject. No one understands this better than Brad Feld and Jason Mendelson. The founders and driving force behind the Foundry Group—a venture capital firm focused on investing in early-stage information technology companies—Brad and Jason have been involved in hundreds of venture capital financings. Their investments range from small startups to large Series A venture financing rounds. The new edition of \u003ci\u003eVenture Deals\u003c\/i\u003e continues to show fledgling entrepreneurs the inner-workings of the VC process, from the venture capital term sheet and effective negotiating strategies to the initial seed and the later stages of development.\u003c\/p\u003e \u003cp\u003eFully updated to reflect the intricacies of startups and entrepreneurship in today's dynamic economic environment, this new edition includes revisions and updates to coverage on negotiating, gender issues, ICO’s, and economic terms. New chapters examine legal and procedural considerations relevant to fundraising, bank debt, equity and convertible debt, how to hire an investment banker to sell a company, and more.\u003c\/p\u003e \u003cul\u003e \u003cli\u003eProvides valuable, real-world insights into venture capital structure and strategy\u003c\/li\u003e \u003cli\u003eExplains and clarifies the VC term sheet and other misunderstood aspects of capital funding\u003c\/li\u003e \u003cli\u003eHelps to build collaborative and supportive relationships between entrepreneurs and investors\u003c\/li\u003e \u003cli\u003eDraws from the author’s years of practical experience in the VC arena\u003c\/li\u003e \u003cli\u003eIncludes extensively revised and updated content throughout to increase readability and currency\u003c\/li\u003e \u003c\/ul\u003e \u003cp\u003e\u003ci\u003eVenture Deals: Be Smarter Than Your Lawyer and Venture Capitalist\u003c\/i\u003e is a must-have resource for Any aspiring entrepreneur, venture capitalist, or lawyer involved in VC deals as well as students and instructors in related areas of study.\u003c\/p\u003e \u003cp\u003eForeword by \u003ci\u003eFred Wilson\u003c\/i\u003e (3rd Edition) xi\u003c\/p\u003e \u003cp\u003eForeword by \u003ci\u003eJames Park\u003c\/i\u003e (3rd Edition) xiii\u003c\/p\u003e \u003cp\u003eForeword by \u003ci\u003eDick Costolo\u003c\/i\u003e (1st and 2nd Editions) xv\u003c\/p\u003e \u003cp\u003ePreface xvii\u003c\/p\u003e \u003cp\u003eAcknowledgments xxiii\u003c\/p\u003e \u003cp\u003eIntroduction: The Art of the Term Sheet 1\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 1 The Players 3\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Entrepreneur 3\u003c\/p\u003e \u003cp\u003eThe Venture Capitalist 4\u003c\/p\u003e \u003cp\u003eFinancing Round Nomenclature 7\u003c\/p\u003e \u003cp\u003eTypes of Venture Capital Firms 9\u003c\/p\u003e \u003cp\u003eThe Angel Investor 10\u003c\/p\u003e \u003cp\u003eThe Syndicate 12\u003c\/p\u003e \u003cp\u003eThe Lawyer 13\u003c\/p\u003e \u003cp\u003eThe Accountant 14\u003c\/p\u003e \u003cp\u003eThe Banker 15\u003c\/p\u003e \u003cp\u003eThe Mentor 15\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 2 Preparing for Fundraising 17\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eChoosing the Right Lawyer 17\u003c\/p\u003e \u003cp\u003eProactive versus Reactive 18\u003c\/p\u003e \u003cp\u003eIntellectual Property 20\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 3 How to Raise Money 23\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e“Do. Or Do Not. There is No Try.” 23\u003c\/p\u003e \u003cp\u003eDetermine How Much You are Raising 24\u003c\/p\u003e \u003cp\u003eFundraising Materials 26\u003c\/p\u003e \u003cp\u003eDue Diligence Materials 32\u003c\/p\u003e \u003cp\u003eFinding the Right VC 33\u003c\/p\u003e \u003cp\u003eFinding a Lead VC 34\u003c\/p\u003e \u003cp\u003eHow VCs Decide to Invest 35\u003c\/p\u003e \u003cp\u003eUsing Multiple VCs to Create Competition 38\u003c\/p\u003e \u003cp\u003eClosing the Deal 39\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 4 Overview of the Term Sheet 41\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Key Concepts: Economics and Control 42\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 5 Economic Terms of the Term Sheet 45\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eValuation and Price 45\u003c\/p\u003e \u003cp\u003eEmployee Option Pool 47\u003c\/p\u003e \u003cp\u003eWarrants 50\u003c\/p\u003e \u003cp\u003eHow Valuation is Determined 52\u003c\/p\u003e \u003cp\u003eLiquidation Preference 54\u003c\/p\u003e \u003cp\u003ePay-to-Play 63\u003c\/p\u003e \u003cp\u003eVesting 66\u003c\/p\u003e \u003cp\u003eExercise Period 70\u003c\/p\u003e \u003cp\u003eAntidilution 71\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 6 Control Terms of the Term Sheet 77\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eBoard of Directors 77\u003c\/p\u003e \u003cp\u003eProtective Provisions 81\u003c\/p\u003e \u003cp\u003eDrag-Along Agreement 85\u003c\/p\u003e \u003cp\u003eConversion 88\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 7 Other Terms of the Term Sheet 91\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eDividends 91\u003c\/p\u003e \u003cp\u003eRedemption Rights 93\u003c\/p\u003e \u003cp\u003eConditions Precedent to Financing 95\u003c\/p\u003e \u003cp\u003eInformation Rights 97\u003c\/p\u003e \u003cp\u003eRegistration Rights 98\u003c\/p\u003e \u003cp\u003eRight of First Refusal 100\u003c\/p\u003e \u003cp\u003eVoting Rights 102\u003c\/p\u003e \u003cp\u003eRestriction on Sales 102\u003c\/p\u003e \u003cp\u003eProprietary Information and Inventions Agreement 103\u003c\/p\u003e \u003cp\u003eCo-Sale Agreement 104\u003c\/p\u003e \u003cp\u003eFounders’ Activities 105\u003c\/p\u003e \u003cp\u003eInitial Public Offering Shares Purchase 106\u003c\/p\u003e \u003cp\u003eNo-Shop Agreement 107\u003c\/p\u003e \u003cp\u003eIndemnification 110\u003c\/p\u003e \u003cp\u003eAssignment 110\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 8 Convertible Debt 113\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eArguments for and Against Convertible Debt 114\u003c\/p\u003e \u003cp\u003eThe Discount 116\u003c\/p\u003e \u003cp\u003eValuation Caps 117\u003c\/p\u003e \u003cp\u003eInterest Rate 119\u003c\/p\u003e \u003cp\u003eConversion Mechanics 119\u003c\/p\u003e \u003cp\u003eConversion in a Sale of the Company 121\u003c\/p\u003e \u003cp\u003eWarrants 122\u003c\/p\u003e \u003cp\u003eOther Terms 125\u003c\/p\u003e \u003cp\u003eEarly Stage versus Late Stage Dynamics 125\u003c\/p\u003e \u003cp\u003eCan Convertible Debt Be Dangerous? 126\u003c\/p\u003e \u003cp\u003eAn Alternative to Convertible Debt 127\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 9 The Capitalization Table 129\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003ePrice per Share with Convertible Notes 131\u003c\/p\u003e \u003cp\u003ePre-Money Method 132\u003c\/p\u003e \u003cp\u003ePercentage-Ownership Method 133\u003c\/p\u003e \u003cp\u003eDollars-Invested Method 133\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 10 Crowdfunding 137\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eProduct Crowdfunding 137\u003c\/p\u003e \u003cp\u003eEquity Crowdfunding 139\u003c\/p\u003e \u003cp\u003eHow Equity Crowdfunding Differs 141\u003c\/p\u003e \u003cp\u003eToken Crowdfunding 143\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 11 Venture Debt 145\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Role of Debt versus Equity 145\u003c\/p\u003e \u003cp\u003eThe Players 147\u003c\/p\u003e \u003cp\u003eHow Lenders Think about Loan Types 148\u003c\/p\u003e \u003cp\u003eEconomic Terms 151\u003c\/p\u003e \u003cp\u003eAmortization Terms 154\u003c\/p\u003e \u003cp\u003eControl Terms 157\u003c\/p\u003e \u003cp\u003eNegotiation Tactics 161\u003c\/p\u003e \u003cp\u003eRestructuring the Deal 163\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 12 How Venture Capital Funds Work 167\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eOverview of a Typical Structure 168\u003c\/p\u003e \u003cp\u003eHow Firms Raise Money 169\u003c\/p\u003e \u003cp\u003eHow Venture Capitalists Make Money 171\u003c\/p\u003e \u003cp\u003eHow Time Impacts Fund Activity 175\u003c\/p\u003e \u003cp\u003eReserves 177\u003c\/p\u003e \u003cp\u003eCash Flow 179\u003c\/p\u003e \u003cp\u003eCross-Fund Investing 179\u003c\/p\u003e \u003cp\u003eDeparting Partners 181\u003c\/p\u003e \u003cp\u003eCorporate Venture Capital 181\u003c\/p\u003e \u003cp\u003eStrategic Investors 183\u003c\/p\u003e \u003cp\u003eFiduciary Duties 184\u003c\/p\u003e \u003cp\u003eImplications for the Entrepreneur 185\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 13 Negotiation Tactics 187\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eWhat Really Matters? 187\u003c\/p\u003e \u003cp\u003ePreparing for the Negotiation 188\u003c\/p\u003e \u003cp\u003eA Brief Introduction to Game Theory 191\u003c\/p\u003e \u003cp\u003eNegotiating in the Game of Financings 193\u003c\/p\u003e \u003cp\u003eNegotiating Other Games 194\u003c\/p\u003e \u003cp\u003eNegotiating Styles and Approaches 195\u003c\/p\u003e \u003cp\u003eCollaborative Negotiation versus Walk-Away Threats 199\u003c\/p\u003e \u003cp\u003eBuilding Leverage and Getting to Yes 200\u003c\/p\u003e \u003cp\u003eThings Not to Do 203\u003c\/p\u003e \u003cp\u003eGreat Lawyers versus Bad Lawyers versus No Lawyers 205\u003c\/p\u003e \u003cp\u003eCan You Make a Bad Deal Better? 206\u003c\/p\u003e \u003cp\u003eChapter 14 Raising Money the Right Way 209\u003c\/p\u003e \u003cp\u003eDon’t Be a Machine 209\u003c\/p\u003e \u003cp\u003eDon’t Ask for a Nondisclosure Agreement 210\u003c\/p\u003e \u003cp\u003eDon’t Email Carpet-Bomb VCs 210\u003c\/p\u003e \u003cp\u003eNo Often Means No 211\u003c\/p\u003e \u003cp\u003eDon’t Ask for a Referral If You Get a No 211\u003c\/p\u003e \u003cp\u003eDon’t Be a Solo Founder 212\u003c\/p\u003e \u003cp\u003eDon’t Overemphasize Patents 213\u003c\/p\u003e \u003cp\u003eDon’t Be Silent If You Witness Bad Behavior 213\u003c\/p\u003e \u003cp\u003eChapter 15 Issues at Different Financing Stages 215\u003c\/p\u003e \u003cp\u003eSeed Deals 215\u003c\/p\u003e \u003cp\u003eEarly Stage 216\u003c\/p\u003e \u003cp\u003eMid and Late Stages 217\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 16 Letters of Intent: The Other Term Sheet 221\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eStructure of a Deal 222\u003c\/p\u003e \u003cp\u003eAsset Deal versus Stock Deal 225\u003c\/p\u003e \u003cp\u003eForm of Consideration 227\u003c\/p\u003e \u003cp\u003eAssumption of Stock Options 228\u003c\/p\u003e \u003cp\u003eRepresentations, Warranties, and Indemnification 232\u003c\/p\u003e \u003cp\u003eEscrow 233\u003c\/p\u003e \u003cp\u003eConfidentiality\/Nondisclosure Agreement 235\u003c\/p\u003e \u003cp\u003eEmployee Matters 236\u003c\/p\u003e \u003cp\u003eConditions to Close 237\u003c\/p\u003e \u003cp\u003eThe No-Shop Clause 238\u003c\/p\u003e \u003cp\u003eFees, Fees, and More Fees 239\u003c\/p\u003e \u003cp\u003eRegistration Rights 240\u003c\/p\u003e \u003cp\u003eShareholder Representatives 241\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 17 How to Engage an Investment Banker 243\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eWhy Hire an Investment Banker? 243\u003c\/p\u003e \u003cp\u003eHow to Choose an M\u0026amp;A Adviser 245\u003c\/p\u003e \u003cp\u003eNegotiating the Engagement Letter 247\u003c\/p\u003e \u003cp\u003eHelping Your Banker Maximize the Outcome 251\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 18 Why Do Term Sheets Even Exist? 253\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eConstraining Behavior and the Alignment of Incentives 254\u003c\/p\u003e \u003cp\u003eTransaction Costs 255\u003c\/p\u003e \u003cp\u003eAgency Costs and Information Asymmetry 256\u003c\/p\u003e \u003cp\u003eReputation Constraints 257\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 19 Legal Things Every Entrepreneur Should Know 259\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eIntellectual Property 259\u003c\/p\u003e \u003cp\u003ePatents 261\u003c\/p\u003e \u003cp\u003eTrademarks 262\u003c\/p\u003e \u003cp\u003eEmployment Issues 263\u003c\/p\u003e \u003cp\u003eType of Corporate Structure 264\u003c\/p\u003e \u003cp\u003eAccredited Investors 265\u003c\/p\u003e \u003cp\u003eSection 409A Valuations 266\u003c\/p\u003e \u003cp\u003e(83)b Elections 267\u003c\/p\u003e \u003cp\u003eFounders’ Stock 268\u003c\/p\u003e \u003cp\u003eConsultants versus Employees 269\u003c\/p\u003e \u003cp\u003eCompensating Service Providers 270\u003c\/p\u003e \u003cp\u003eAuthors’ Note 273\u003c\/p\u003e \u003cp\u003eAppendix A: Sample Term Sheet 275\u003c\/p\u003e \u003cp\u003eAppendix B: Foundry Group Term Sheet 285\u003c\/p\u003e \u003cp\u003eAppendix C: Sample Letter of Intent 295\u003c\/p\u003e \u003cp\u003eAppendix D: Additional Resources 303\u003c\/p\u003e \u003cp\u003eGlossary 307\u003c\/p\u003e \u003cp\u003eAbout the Authors 321\u003c\/p\u003e \u003cp\u003eIndex 323\u003c\/p\u003e \u003cp\u003eExcerpt from \u003ci\u003eStartup Communities \u003c\/i\u003e333\u003c\/p\u003e  \u003cp\u003e\u003cb\u003eBRAD FELD\u003c\/b\u003e has been an early stage investor and entrepreneur for over thirty years. Prior to cofounding Foundry Group, he cofounded Mobius Venture Capital and Intensity Ventures. He is also a cofounder of Techstars. \u003c\/p\u003e\u003cp\u003e\u003cb\u003eJASON MENDELSON\u003c\/b\u003e has over twenty years experience in the venture capital and technology industries in a multitude of investing, legal, and operational roles. Prior to cofounding Foundry Group, Jason was a Managing Director and General Counsel for Mobius Venture Capital. He is also a cofounder of SRS\/Acquiom.   \u003c\/p\u003e\u003cp\u003eThere has never been a better time for entrepreneurs to create a startup. With decreasing costs of getting started and operating a business, the ability to be a founder has become increasingly democratized across the globe. On top of this, the amount of funding sources has dramatically increased not only in number, but also in types, as non-traditional sources like crowdfunding and accelerators have become important players in the ecosystem. Today, an entrepreneur raising money has a lot more options than even just a few years ago. The question becomes \"how does one evaluate these opportunities and maximize the result?\" \u003c\/p\u003e\u003cp\u003eBrad Feld and Jason Mendelson are back with version four of their \u003ci\u003eWall Street Journal\u003c\/i\u003e and Amazon bestseller. Packed with the latest insights and emerging trends, the authors' fifty-plus years of collective experience are at your fingertips. Whether you need advice on raising money, negotiating a term sheet, selling your business, or really just want to have insider access into what makes venture capitalists tick, this book is for you. \u003c\/p\u003e\u003cp\u003eBrad and Jason discuss different stages of financings, the many types of different investors who might fund your company, as well as the different avenues of funding, whether they be equity, traditional convertible debt, venture bank debt, or one of the newer practices of crowdfunding and pre-sales. \u003c\/p\u003e\u003cp\u003eWhether you are a new or seasoned entrepreneur, lawyer, venture capitalist, educator, or student of the industry, \u003ci\u003eVenture Deals, Fourth Edition\u003c\/i\u003e is the go-to-guide to navigating the venture landscape. \u003c\/p\u003e\u003cp\u003eFor additional information, including term sheets and all the documents generated from the term sheet as part of venture financing, visit the authors' website at venturedeals.com. \t   \u003c\/p\u003e\u003cp\u003ePraise For \u003cb\u003e\u003ci\u003eventure deals \u003c\/i\u003e\u003c\/b\u003e \u003c\/p\u003e\u003cp\u003e\"Every venture capitalist believes they know how to do venture deals. Jason and Brad, however, actually have deep knowledge and insight and are willing to share the details of how to get deals done right. While this book may not actually make you smarter than your lawyer (assuming you have a good one), it is an essential read for entrepreneurs, lawyers, and venture capitalists who want to be successful in a critical part of building a great company: raising money.\" \u003cb\u003e —Eric Jensen,\u003c\/b\u003e Partner, Cooley LLP \u003c\/p\u003e\u003cp\u003e\"One of the greatest lessons for entrepreneurs is to learn from others and take advice from trusted partners and experts. In \u003ci\u003eVenture Deals,\u003c\/i\u003e Jason and Brad offer entrepreneurs the gift of their experience and expertise over many years and hundreds of deals. Take it and run with it. What you will learn in this book will serve you well in every investment, legal, and banking conversation throughout your life as an entrepreneur. Your ideas and your passion will get you far, and having an insider's understanding of how to fund your ambitious goals will get you there that much faster.\" \u003cb\u003e —Greg Becker,\u003c\/b\u003e CEO, Silicon Valley Bank \u003c\/p\u003e\u003cp\u003e\"Having worked with Brad and Jason during the Internet bubble, I witnessed first-hand the experience they gained by doing deals that covered the entire range of issues an entrepreneur faces today. This is a must-read for both entrepreneurs and investors as it lets each side understand the terminology, structures, and potential issues inherent in venture deals so they can focus on what really matters, regardless of which side they are on. Every entrepreneur who is raising or considering raising venture capital should read this book!\" \u003cb\u003e —Heidi Roizen,\u003c\/b\u003e Partner, DFJ \u003c\/p\u003e\u003cp\u003e\"Feld and Mendelson pack a graduate-level course into this energetic and accessible book. The authors' frank style and incisive insight make this a required read for high-growth company entrepreneurs, early stage investors, and graduate students. Start here if you want to understand venture capital deal structure and strategies.\" \u003cb\u003e —Brad Bernthal,\u003c\/b\u003e CU Boulder, Associate Professor of Law, Technology   Policy, Entrepreneurial Law \u003c\/p\u003e\u003cp\u003e\"I've been lucky to have Brad and Jason as mentors on my journey from entrepreneur, to running Techstars Boston, to serving as the first investor to over 100 startups, and now as CEO of The Engine Fund. I give this book to all founders I back. \u003ci\u003eVenture Deals\u003c\/i\u003e is a fundamental resource for both entrepreneurs and venture capitalists.\" \u003cb\u003e —Katie Rae,\u003c\/b\u003e CEO and Managing Partner, The Engine\u003c\/p\u003e","brand":"Wiley","offers":[{"title":"Default Title","offer_id":47990449045733,"sku":"NP9781119594826","price":52.0,"currency_code":"USD","in_stock":false}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/1842\/7735\/files\/9781119594826.jpg?v=1761787875","url":"https:\/\/k12savings.com\/es\/products\/venture-deals-isbn-9781119594826","provider":"K12savings","version":"1.0","type":"link"}