Recommended sources, literature, etc for guidance in startup development
I am meeting with venture capitalists early in December. I want to know if you could recommend literature, websites, contacts, or any helpful info in the development process of my tech startup. I know others have been where I have, and I would appreciate guidance.
Many thanks and best regards
I'd suggest you take a look at Brad Feld's book venture deals before meeting VC people. Helps a lot to understand the key terms you would encounter in the negotiation process and the thinking process of a VC firm.
Keep in mind that most VCs won't invest in pre-revenue companies these days, even at the series A level. Just because the VC took the meeting, it doesn't mean you necessarily meet their criteria today. VCs often take early meetings just to start tracking a company well before they'd be ready to invest.
When you say 'these days' how long ago are you talking? I'm reading the Feld book to learn about the VC industry and it's 5 years old so I assume a lot could be different. What do you have to have to get early stage funding? Are people using a lot more angel/family money to get further along?
The Feld book is still relevant as it's primarily about deal terms and structure. In the past several years you've seen the rise of more accelerators/incubators, super angels and more active angel groups. Most companies start with either a friends and family round, crowd funding (better for consumer products) or funding from an accelerator program (Y Combinator and TechStars are the best known but there are literally hundreds). After that they raise money from individual angels, angel groups and seed stage VC funds.
Funding used to be: Series A -> Series B -> Series C
Now it is: Friends & Family/Crowd Funding -> Series Seed -> Series A
Most companies have a couple of million in run rate revenue before a Series A with an institutional VC whereas in the past it was often the first outside money. Companies today have also typically raise a couple of million from friends & family and/or angels before getting to Series A.
interesting...why is this? too many failures showing the extremely high risk? or just so many people coming up with startup ideas these days VC's have the luxury of waiting for some traction before handing over $?
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