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What type of capital should you raise, and from who?

How do you decide which investor you should target and raise capital from?   I wrote recently about Should you raise venture capital from a traditional equity VC or a Revenue-Based Investing VC?  Since then, I’ve talked with a number of other firms, and greatly expanded my database: Who are the [...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]

Face-to-face 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]

Limited partner due diligence on VC and private equity funds

As a VC, I have a standard due diligence list for companies I’m reviewing.  Similarly, our limited partner investors have their own due diligence standards, and we manage our firm to keep in line with their standards and expectations. The biggest risk for many VC and private equity funds is team [...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]

How VCs structure a syndicate and recruit coinvestors

When I meet with other VCs, family offices, and other institutional investors, the most common question I get is: “What are the highest-potential companies in your portfolio which are raising now?”  I thought it might be helpful to provide transparency on how we and many of our VC peers think about [...continue reading]

Fundraising hacks for VC and private equity funds

Historically, the process of winning capital from limited partners has been opaque.  However, in the last few years a few have started to use social media and become more transparent.  I particularly like OpenLP.com, Origins, and the Raise blog, all of which include content from multiple LPs. [...continue reading]

How Star Wars will help you raise capital for your company

When you’re raising money, you’re telling a story.  So who are some of the best stories and storytellers?   Greek mythology, the Bible, and in modern times, George Lucas and the Wachowski siblings. Star Wars and the Matrix are both modeled on Joseph Campbell’s wildly influential book, The Hero [...continue reading]

Please don’t pitch a venture capitalist without this checklist

I’m surprised at how many funding pitches I get which lack some of the basic information which investors require before funding.  I think this stems from two causes: 1) Lack of basic knowledge of the information investors require.  But I would hope that a reasonably competent founder could easily [...continue reading]

Raise capital with the skin you’re in: blunt truth from Don Charlton, Founder, JazzHR

How do you raise capital for your company when you’re not in the traditional social circles of the money people?  In particular, the VC industry is 76% white male and overwhelmingly straight; what if you do not fit into that bucket? I’m speaking on a panel this afternoon on fundraising for [...continue reading]

How to pitch an entrepreneur and persuade her to take your cash

With the rise of a trillion-dollar crowdfunding market, angel investors bundling their investment offerings, and family offices doing more direct investments, venture capitalists are no longer the only available source for entrepreneurs seeking funding. Now that anyone can benefit from the global [...continue reading]

Helping women and minorities raise angel capital

In early 2012, my HBS Alumni Angels colleagues and I launched the Venture Capital Access Program (VCAP), an initiative to help women and minority-led businesses to raise capital from the Harvard alumni angel community.  This is a partnership between HBS Alumni Angels of Greater NY (HBSAANY) and the [...continue reading]

How to Judge an Investment Proposal (especially at Pitch Contests)

I periodically serve as a judge at pitch events for companies raising funding. In every case, I'm assessing each company against our standard criteria for investing. You can see a video of a recent pitch contest where I served as a judge here. For some of the new employees at our firm, I put [...continue reading]

ff Venture Capital Is First VC Fund To Raise Capital Under The JOBS Act

ff Venture Capital has consistently generated a gross IRR on invested capital in excess of 30%, in a world where the average ten-year returns for venture capital firms are in the single digits.   But, historically we couldn’t say that it in a public setting.  Now we can. Software is eating every [...continue reading]