book · 2011
Venture Deals
by Brad Feld & Jason Mendelson
In a nutshell
Plain explanations of term sheets, valuation and how venture capital deals actually work.
Best for: Anyone about to raise money from investors.
Quotes & ideas we use
In most deals only two things really matter: economics and control. Everything else is detail.
Most terms in a deal relate to either economics or control — focus your attention there.
Pre-money plus the investment equals post-money; ownership is the investment divided by post-money.
Concepts from this book
Fundraising basics
Raising money means selling part of your company. Understand the terms before you sign.
Term sheets, explained
A term sheet is a short document setting out the key terms of an investment before the legal paperwork.
Valuation basics
Early-stage valuation is a negotiation about price, driven by traction, team, market and competition between investors.
Angels vs VCs vs bootstrapping
Different money comes with different expectations — choose the kind that fits your business.