Question: Can you describe the due diligence process from the VC’s perspective and how long this generally takes? Do you have any advice for entrepreneurs to keep in mind as they build a company that would help accelerate the process? The diligence process is a varied one with respect to timing, but pretty standard with […]
Question: How do I come up with projections of a web service that is not being done yet? I know make it up. Actually, please don’t just make it up. That’s a waste of your time. In answering this question, I’m going to assume that you haven’t built your new web service yet and you don’t […]
Question: I am currently shopping VCs, or should I say I am letting them shop me. We have a service that will launch Q1 of 2007 and have had numerous discussions with large and small websites that want to use the service. Is it beneficial to get Letters of Intent from these people to bring […]
Q: You (VC guy) are thinking about making an investment in a new company. The founder(s) relay to you that they are interested in finding a new CEO once the VC money comes in. As a VC, would it make you more or less confident in the founders? First of all, it’s great when founders […]
Tim Wolters – the CTO of Collective Intellect – is in the middle of a financing and blogging about some of the terms. Today’s is the liquidation preference. It’s interesting to compare it to what Jason and I wrote in 2005 about liquidation preferences in our Term Sheet series.
Q: In modeling out an early-stage deal, do you think it would be reasonable to start with a 20% option pool (Round A) and then plan to refresh that on subsequent rounds (ie, make an assumption about having key hires in place by round C or B)? Or should we just allow that option pool […]