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May 17th, 2012 VCs are good at asking questions. They are unimplicated in your dumb decisions, unmoved by your original sense of mission and far less concerned than you that a blunder could bankrupt you. They re-imagine your business in terms of all the other businesses they’ve seen, pulling the arms off one doll and the head off another to create a perfect money-making Frankenstein. And since the stakes are high, the whole philosophical exercise tends to result in action.
Here are the questions VCs asked Redfin that changed how we think about our business.
1. What’s your deadly sin? Sequoia’s Roelof Botha
. . . → Read More: The Eight Best Questions We Got While Raising Venture Capital
May 15th, 2012 Every investor approaches due diligence differently. Some angel investors may request information in a detailed manner all at once, while others may simply request information at different times or stages. Regardless of an investor’s method to obtain information on a potential company, it is a proven fact that exercising thorough due diligence is indicative of more profitable returns. The following documents may be requested in due diligence.
General Corporate Materials These documents include:
The company’s articles of Incorporation (and all amendments) bylaws (and all amendments), minute book (including all minutes and resolutions of shareholders and directors, executive committees, and other
. . . → Read More: Due Diligence Checklist – Angel Investors
May 2nd, 2012 Getting financing for your startup is rarely easy, but if you approach the wrong investor, you can make it even harder than it has to be. “How can there be a ‘wrong investor’?” you might be thinking. “Don’t I just go with whoever is willing to give me the money?”
It’s not quite that simple. Approaching the wrong investor is kind of like asking someone who’s married out on a date. Not only will they turn you down, but they’ll probably think you’re an idiot.
Many first-time entrepreneurs mistakenly lump angel investors and venture capitalists together. While these two types
. . . → Read More: Angel vs. VC: Which Investor Is Best for Your Startup?
April 17th, 2012 This is a Youtube video explanation of a cap (capitalization) table example that is available online. It may take a while get your head around the terminology and concepts involving the option pool and note conversion, and their impact on valuation. It is worth taking time to understand this if you want to see how the option pool and valuation can be played off against each other. Entrepreneurs need to understand this if negotiating with investors.
. . . → Read More: Venture Hacks Series A Cap Table, with Note Conversion and Option Pool
April 6th, 2012 As Obama signs the JOBS Act into law, crowdfunding becomes legal and companies get more flexibility in going public. Here’s the good and the bad.
. . . → Read More: JOBS Act: 5 things to look forward to (and 5 to dread)
March 30th, 2012 The so-called crowdfunding term essentially means pooling resources or money together from a group. Under the Jumpstart Our Business Startups Act, or JOBS Act, small companies will have the ability to raise up to $1 million in equity on an annual basis through crowdfunding, without having to go through the rigorous disclosure process by the Securities and Exchange Commission. To be sure there are a host of unknown answers regarding crowdfunding, but as more companies take to social media to tell their story and gain a following, the strategy could become a major player in the
. . . → Read More: 4 Crowdfunding Cautions for Small Businesses
February 16th, 2012 (This article is focused on raising money for startups with an African focus but it contains some great generic advice on for all startups on needed steps before spending considerable time in fundraising.) This first step is actually common everywhere, entrepreneurs think they deserve financing when its just an idea in their head all the way up to startups showing significant progress but are probably stalling and need significant technical/business help and capital infusion to grow their venture. Also fundraising takes a significant a
. . . → Read More: Raising Seed Investment for Africa focused Tech Startups
February 5th, 2012 I’ve personally raised $1 million from AngelList for my startup, and have helped dozens of other startups raise $3 million more. I’ve referred more than 20 startups to AngelList, vouched for a dozen other investors and am ranked as one of the top connectors on the site. Try a similar strategy by adhering to the following steps.
. . . → Read More: Tips for Raising Startup Funds on AngelList
November 30th, 2009 The initial section covers what to do before you approach a VC (or if you should even raise VC at all), the middle section is what the presentation y
. . . → Read More: Raising Venture Capital
September 22nd, 2008 Raising capital is an art, not a science. While there are some universal truths (no amount of spit and polish will make a bad idea into a compelling
. . . → Read More: Bill’s Thoughts on Raising Capital
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