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How to choose an investment banker…or replicate one

Should you hire an investment banker?  And if so, who? The good news: even if you are a small company and can’t afford a banker, you can synthetically and cheaply replicate a banker. That’s part of the value proposition of an institutional VC; I have been the (unpaid) investment banker for many [...continue reading]

Fundraising Hacks: What type of capital should you raise, and how do you meet investors?

How do you decide which investor you should target and raise capital from?   Venture capital is just one of many options to finance your business, and it’s typically the most expensive. The broader question is: what type of capital should you raise, and from whom? I find many CEOs/CFOs default [...continue reading]

Should you raise traditional VC or Revenue-Based Investing VC?

 Most founders who are raising capital look first to traditional equity VCs. But should they?  Or should they look to one of the new wave of Revenue-Based Investors? Revenue-Based Investing (“RBI”) is a new form of VC financing, distinct from the preferred equity structure most VCs use.  RBI [...continue reading]

Marketing Your Portfolio Companies to Other Investors

One of my most important responsibilities as a VC is recruiting appropriate co-investors and follow-on investors.  See How VCs structure a syndicate and recruit coinvestors for more on this. I’ve provided here a template for sharing profiles of your companies with other VCs.  At every VC where [...continue reading]

Should you co-found a company with your friend? And how do you split the equity?

If you’re talking with cofounders about launching a new business, you’re fundamentally recruiting someone to take the job of partnering with you for the next decade.  I see a lot of founders who do less due diligence than I think ideal before making that long-term commitment. Just knowing one [...continue reading]

Meetings are important, but written collateral is mandatory for closing the deal

I’ve noticed a lot of founders raising capital prefer to have face to face meetings, as opposed to answering questions in writing.  Some don't want to share a deck in advance of a meeting. When you’re fundraising, I suggest keep in mind you are accomplishing different goals.  The goal of all [...continue reading]

The investment committee rejected you; what does that actually mean?

One of the most common ways a venture capitalist rejects you is a variation of, “I love you, I love your company.  I brought it up to the investment committee (“IC”)....but they turned it down.” What does that actually mean? Is this the business equivalent of telling a flame, “It’s not you, it’s [...continue reading]

Your startup is dying — now what?

“Mann Tracht, Un Gott Lacht” (“Man Plans, and God Laughs.”) We hope for the best, but are forced to plan for the worst.  Almost all VCs will have companies that fail. The CEO comes to us.  She has 3 months of cash left. Existing investors have said they’d be glad to invest…if she gets a [...continue reading]