Workshop C : November 3, 2008

Venture Finance and Valuation

Quote of the Day

"It's not the size of the slice, but the size of the pie that metters."

Summary

Raising money is arguably one of the most important decisions a founding team has to make. How much to raise? How much equity to give up? What is a fair valuation? What does the term sheet really say? In this workshop, we will try to address some of these questions by looking at funding options, term terms to lookout for, and learning some basic venture math.

Recommended Readings (Policy on Recommended Readings.)

• A general note on valuation
• For a sense of how things change when the economy does: Savage Deal Terms by VC Expers, Inc. (2001)
• Read entries from the term sheet blog: http://www.feld.com/blog/archives/term_sheet/
• Fenwick and West Term Sheet Article
• "Put It Into Perspective," by Jesse Reyes (A great article on understanding VCs as portfolio managers -- you have to understand what VCs are in business to do before you can consider the entrepreneurial perspective.)
• For some more information about anti-dilution: O’Donnell, Michael J. and Anton T. Commissaris, “The Venture Capital Anti-Dilution Solution,” Wilson Sonsini Goodrich & Rosati (undated).