While it sounds tautological, the most important thing a law firm brings to the startup table is…a knowledge of the law surrounding everything having to do with founding, financing and operating a startup!
But while obvious, that doesn’t make it any less important. There are an enormous number of laws that cover the world of business, and those go up almost exponentially once you start dealing with fundraising/financing. Many times I have seen startups skimp on legal expenses in the early days, only to learn the very costly lesson that a lot of work had to be done over again, and in some cases even jeopardized the company’s very existence. The peace of mind that comes from knowing that a firm like WSGR or White & Williams has your back is extraordinarily liberating. Trust me. Read more
The best way for a VC to mitigate conflicts between portfolio companies is to avoid investing in direct competitors in the first place! While this can be a bit difficult for seed funds with very large portfolios and limited direct day-to-day involvement, most larger funds are careful to avoid directly competitive investments. The reason for this is simple: why have part of your investment in one company be used for the sole purpose of fighting against part of your investment in another one? Read more
The rating system provided by Gust on the investor side is not intended to be used as any type of objective or standardized measurement. That’s because it was designed to be completely customizable for each angel group or venture fund using the platform.
Group administrators have the ability to turn ratings on or off, show or hide them, establish the scale for them, and decide on how many criteria a profile is rated. As such, it is an extremely flexible system that can be used in many different ways, so an “average” would be like averaging apples and truffles. Read more
There are surprisingly few such conferences, for the very good reason that there are actually relatively few such people (venture capitalists and ‘professional’ angel investors) to attend them! But that said, here are the biggest (i.e., “only” events of their type):
Angel Capital Association (US) Annual Summit
This is the big one, which rotates among different cities in the US each year. Leaders and active members of all the major North American angel groups attend this three day conference, along with a large delegation of international business angels. Sessions are all about how to improve angel investing and manage angel groups, as well as connecting with other industry players and getting technical presentations. The first day is full of optional educational seminars from The Power of Angel Investing series, developed by the Angel Resource Institute. Read more
The answer is no, yes, and it’s irrelevant.
Back in the days of the dinosaurs, my first software company was in the wireless communications space (when that meant “pagers”, not “smartphones”), and our product let you type a message on your computer and send it to a pager, using a very simple protocol known as “TAP”. We were—by far—the market leader in the industry (providing the software for Motorola, Nextel, Apple, Sprint, etc.) despite having lots of competitors. When people would ask a similar question back then about the difficulty of software development, my usual response was “anyone can write a TAP program over a weekend that will work with 80% of the paging systems in the world…but getting it to work on the other 20% will take you a year.”
With that in mind… Read more
There are two separate and distinct sets of things that you need to look at when evaluating an offer.
The first, and most important, has to do with who the investment is from. It is impossible to over-emphasize the value of “smart money” and “good money” over “dumb money” and “evil money”. You should do at least as much diligence on your potential investor as they are doing on you. You should check references (speak with as many of their portfolio CEOs as you can, cold-calling them preferably), read everything written about them, and that they have written. Have long talks with them about what they are looking for in the relationship, what your respective ideas are when it comes to exits and long-term management of enterprise, and how much dry powder they are keeping for future follow-on investments. Above all, look for unimpeachable integrity and strong personal chemistry, so that you will both feel comfortable when there are tough decisions to be made. Read more
While anything is technically possible, the reality is that venture capital firms do not fund “ideas”. There are many wonderful ideas, and even many people having the same idea in the market at any given time. So what VCs fund is execution. Indeed, VCs only invest in one out of every 400 fully-formed companies that approach them for funding…let alone someone with a “startup idea”. Read more