Found in 24 comments on Hacker News
andrewstuart · 2023-10-12 · Original thread
I'm listening to the audiobook of "Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist "

https://www.amazon.com.au/Venture-Deals-Smarter-Lawyer-Capit...

It's worth listening to if you want to understand this stuff better.

Having just listened to this book, I would guess that this sale has not been a great outcome for the founder and employees.

O__________O · 2022-08-30 · Original thread
Beyond your specific question, which appears to have been answered, highly recommend the book “Venture Deals” to learn more about equity based funding:

https://www.amazon.com/Venture-Deals-Smarter-Lawyer-Capitali...

ericskiff · 2020-07-26 · Original thread
As a developer turned co-CEO, developing an understanding of the differences between cashflow, revenue, profit, and overhead was critical.

My recommendations are a little different from most other folks here, in that they relate to understanding the business as a whole and how finance figures into it:

Norm Brodsky's "The Knack" http://theknack.info/

Jack Stack's "A Stake in the Outcome" https://www.amazon.com/Stake-Outcome-Building-Ownership-Long...

If you're in a startup environment, Brad Feld's "Venture Deals" https://www.amazon.com/Venture-Deals-Smarter-Lawyer-Capitali...

I wonder how well they explain to their employees how this can wipe out their upside. Venture Deals by Brad Feld is a great read to help understand why this is potentially a dangerous situation to be in: https://www.amazon.com/Venture-Deals-Smarter-Lawyer-Capitali...
digitalboss · 2018-07-23 · Original thread
Here's the 3rd edition of the Venture Deals book https://www.amazon.com/Venture-Deals-Smarter-Lawyer-Capitali...
x0x0 · 2018-07-23 · Original thread
We're in a similar place -- finished our first priced round.

Comments:

Blatant unfairness: yes, warm intros are required. Yes, this is unfair. However, the onus is on you to make this happen. If you want to found a startup, put your time in to building your network. If you're at a startup now, get intros to the VCs. Ask to go to VC meetings.

When you're building the network of people you're going to ask for angel cash, do the same. Lots of them will be happy to give you those warm intros. So start now building a network of people you can ask for $10-$25k. This wasn't obvious to me, but an intro to a vc from an angel who has invested counts as a great intro.

The same network will get you into one of the good lawyers (cooley, sonsini, gunderson) with a warm intro who will also do a deferred fee deal for $15-$25k. You want this.

The other thing that is unfair is, at least in b2b, the more customers you have the easier a raise will be. How do you get those first customers when you have nothing except a site that breaks all the time and a tiny team? That's your problem; make it happen.

Passionate origin story: we build a b2b tech. Most VCs seemed happy with

1 - we understood this problem from working on/near it

2 - we're building a solution

Oh, and read the book _venture deals_ by brad feld and jason mendelson [1]. Seriously. It's extraordinarily valuable.

Seriously consider doing the YC pre-YC program. It's all funnel for YC, but the info is good. Though it can be summed up (only somewhat facetiously) as, "Have you talked to customers yet? Maybe you should talk to customers. If you've talked to customers, talk to more! If you've talked to more customers, talk to even more! And after that... talk to some customers!"

Understand that the seed and A all want 25%; plan accordingly. Within that range, they are less price sensitive.

If you have questions, I'm happy to answer them, but I'm busy (the startup experience is everyone in your life is grumpy at you for flaking on them) so no promises on response time.

[1] https://www.amazon.com/Venture-Deals-Smarter-Lawyer-Capitali...

slap_shot · 2018-07-18 · Original thread
Venture Deals by Brad Feld and Jason Mendelson is required reading before fundraising.

https://www.amazon.com/Venture-Deals-Smarter-Lawyer-Capitali...

tedmiston · 2018-02-07 · Original thread
The investors in VC funds are called Limited Partners (LPs), as opposed to General Partners (GPs). LPs raise money from high-net worth individuals (HNWIs), funds of funds, etc.

Maybe what you read had some qualifier attached to it like across all VC funds "on average". With funds, the outliers are everything like with successful startups. Deal flow varies greatly by VC. A similar comment, and one that holds up, is that most startup accelerators have 0 "successful" exits.

Brad Feld's book Venture Deals [1] is a great reference if you want to learn a bit more from multiple perspectives.

[1]: https://www.amazon.com/Venture-Deals-Smarter-Lawyer-Capitali...

dmourati · 2017-06-02 · Original thread
May I recommend anyone wishing to understand more about valuation read the book Venture Deals?

https://www.amazon.com/Venture-Deals-Smarter-Lawyer-Capitali...

The subtitle is tongue in cheek but also gives you a sense of how much you can learn and how rare company you are in once you understand the details.

bfeld · 2017-03-01 · Original thread
Lots of updates in the book I wrote with Jason Mendelson titled Venture Deals - http://amzn.to/2mbB6jW
willyk · 2015-12-23 · Original thread
For those interested in this topic, I suggest reading 'Venture Deals' by Brad Feld. While it's broader than this topic, it does cover some of the legal/technical elements of vc funding and exits, which help when trying to understand outcomes such as this (i.e., preferred vs common shares, etc). http://www.amazon.com/Venture-Deals-Smarter-Lawyer-Capitalis...
ttruong · 2015-07-22 · Original thread
Venture Deals by Brad Feld and Jason Mendelson: http://www.amazon.com/Venture-Deals-Smarter-Lawyer-Capitalis...
supster · 2015-05-10 · Original thread
Why do you want investors should be your first question. Raising money means dilution and being put on a vesting schedule along with having to deal with liquidation preferences or headaches of convertible debt (see this book[1] to understand some of these terms). Second, finding investors usually takes connections. For young CS grads, easiest way would be through the university's tech commercialization office. Another would be an accelerator or incubator. Then you could reach out to mutual connections in your network to find angel investors or seed funds. Hope that helps. If you need more help feel free to contact me (my email is in my profile). Good luck!

1) http://www.amazon.com/Venture-Deals-Smarter-Lawyer-Capitalis...

loopbit · 2015-03-18 · Original thread
Perhaps not exactly what you are looking for, but a very good read on the subject is "Venture Deals" (http://www.amazon.com/Venture-Deals-Smarter-Lawyer-Capitalis...).

If you want to know exactly what rights your shares have (and don't have), this is the book.

27182818284 · 2014-09-08 · Original thread
Yes, http://www.amazon.com/Venture-Deals-Smarter-Lawyer-Capitalis...

By no means is that complete, but that should give you a primer, and I learned about it from other startups that successfully have raised funds. (I was in the dark too at a point. https://news.ycombinator.com/item?id=4064276)

The other big thing is just to get out and talk with other founders near you. I found (at least in our community) they were very willing to share information over a beer or soda.

spuiszis · 2014-09-07 · Original thread
The a16z website shows the current portfolio (most recent, un-exited investment) and does not display their entire investment history. If you check out their Crunchbase profile[1], they have already had some big exits with Groupon, Zynga, Skype and Instagram, which is quite impressive since they only started investing 3 years ago. I'm sure there have been some other medium/large M&A liquidity events as well but it usually takes 3-5 years to figure out if your VC portfolio is any good and 7+ years to realize any returns. LPs know this and funds usually have a 10 year life cycle, sometimes with options to extend it a year or two [2].

[1]http://www.crunchbase.com/organization/andreessen-horowitz/i... [2]http://www.amazon.com/Venture-Deals-Smarter-Lawyer-Capitalis...

27182818284 · 2014-08-15 · Original thread
>to ask for? Is there an "idiots guide" to equity?

Not exactly, but I'd recommend reading http://www.amazon.com/Venture-Deals-Smarter-Lawyer-Capitalis... because I think it will help despite being focusing more on founder vs investor rather than employee asking for equity.

dangoldin · 2014-04-23 · Original thread
Not sure if you meant a book on the web but I liked Venture Deals - http://www.amazon.com/Venture-Deals-Smarter-Lawyer-Capitalis...
sokoloff · 2014-03-04 · Original thread
I liked Venture Deals: Be Smarter than your Lawyer and VC.

Amazon affiliate link: http://www.amazon.com/gp/product/1118443616/ref=as_li_ss_tl?...

Amazon non-affiliate link: http://www.amazon.com/Venture-Deals-Smarter-Lawyer-Capitalis...

(Choose whichever you prefer.)

JeffJenkins · 2013-11-21 · Original thread
The really short version is that the company sells (probably newly created) shared in exchange for money. The owners of the company are generally not selling their own shares. That would lead to serious complexity.

If you want to know more, read Venture Deals[1]. It's very thorough and well written.

[1] http://www.amazon.com/Venture-Deals-Smarter-Lawyer-Capitalis...

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