Every once in a while I get a book in the mail from a publisher that I decide to read just because I want to learn something new. Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist by Brad Feld and Jason Mendelson is one such book that I decided to try just because venture capitalism is something I wanted to know more about.
This is the highly anticipated third edition of the best-selling book which has become the definitive resource for understanding venture capital fundraising. Whether you are an entrepreneur, lawyer, student or just have an interest in the venture capital ecosystem, Venture Deals is for you. The book dives deeply into how deals are constructed, why certain terms matter (and others don’t), and more importantly, what motivates venture capitalists to propose certain outcomes. You’ll see the process of negotiating from the eyes of two seasoned venture capitalists who have over 40 years of investing experience as VCs, LPs, angels, and founders. They will teach you how to develop a fundraising strategy that will be a win for all parties involved.
This book is designed to bring transparency to the venture capital funding process and includes such topics as:
How to raise money;
What terms matter and which ones don’t;
How to negotiate a fair deal for everyone;
What makes venture capitalists tick, including how they are compensated and motivated;
How companies are valued by venture capitalists;
How all current structures of funding work, including convertible debt, crowdfunding, pre-sales and other non-traditional methods;
How these particular issues change through different stages of financing (seed, early, mid and late); and
How to avoid business and legal pitfalls that many entrepreneurs make.
The book is full of good information about how startups can make money, from crowdfunding to angel investors; the book walks the entrepreneur through the steps needed to get funding for projects. I don’t know if I will ever need or be a venture capitalist, but if I do, this book will be the first thing I will re-read.
I also wonder that if in the age of Trump, we will see more entrepreneurs who feel that their business is more likely to succeed (or at least not be impeded) with more business friendly regulations and a positive climate?