Thoughts on startups by investors that
fund them & entrepreneurs that run them

Category Archives: Invested Interests

How does one go about becoming a Venture Capitalist?

As Ryan Lackey noted, having a lot of money is essentially irrelevant in this context, because that is not the way venture capital works.

Set Your Online Reputation Before Someone Else Does

Image via Flickr by krossbow

These days, your online Internet reputation is your reputation. Of course, having no reputation is usually better than a bad one, but don’t wait for someone else to establish a good one for you. It’s time for every business and business person to proactively create a positive presence, before someone else puts you in a

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What is the process of a (new) VC firm raising its first fund?

There are some great answers here already (and there’s no way I’m going to try to top Terrence Yang‘s magnum opus :-), so I will simply point you to a first-hand account of the challenges of VC fund-raising by Alan Patricof, the founder of Greycroft Partners.

How do US venture capital firms view an entrepreneur who decides to go for funding to the US with a business plan, and then will need a visa?

The disappointing fact is that this is a highly, highly unlikely scenario, for several reasons.

The most important is that venture capital firms simply do not fund business plans. They fund companies. There are several excellent explanations hereas to why this is the case, but the bottom line is that VCs are able to fund only one out of every 400 companies who approach them, and

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Founder’s Stock Is Gold, If You Know The Rules

Image via Flickr by BullionVault

In reality, so-called “Founder’s” shares are simply common stock, issued at the time of startup incorporation, for a very low price, and normally allocated to the multiple initial players commensurate with their investment or role. But that’s only the beginning of the story.

These shares are allocated and committed, but not really issued and owned (vested)

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What does it feel like to invest in a failed startup as an angel investor?

It’s not great…but it IS part of the business.

If you are an angel investor, the only way to do it is to take things very seriously.
If you take angel investing seriously, you should aim to develop a portfolio of at least 30-40 investments over 5-10 years of active investing.
If you invest in 40 startups, 20 of them (absolute minimum!) are going to

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What are the average terms for Angel Investors’ seed fundings?

There is no average, because every company and situation is different. But as a general rule of thumb, the investors in each round of financing will get somewhere between 15% and 35% of the equity in the company, and the total amount raised in each round should be enough to get the company to a significant increase in value.

Why Startups Face Increasing Competition In Raising Series As And Bs

By Tomasz Tunguz, Partner at Redpoint Ventures

Has it become harder to raise money? is a question I hear all the time. On one hand, the total dollars invested by VCs is relatively flat at just under $30B per year, according to the NVCA. On the other hand, the stories of difficulty raising series As and Bs have become a steady drumbeat.

To

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How To Size Your Marketing Budget For Funding

Image via Flickr.com

It’s not uncommon for me to see a startup business plan “mission” to be the “premier brand” for their product, yet their marketing budget in the financials is trivial. This combination will almost certainly get your plan tossed by potential investors, who understand all too well the need and cost for marketing in today’s environment.

When questioned, founders

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Working with Startups what do Law Firms and Attorneys contribute?

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

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