A Serial Entrepreneur’s Take On Brad Feld & Jason Mendelson’s Venture Deals

Author: John Greathouse
Published: November 01, 2011 at 2:16 pm
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As an Instructor of entrepreneurship at UC Santa Barbara, I welcomed the chance to read Brad Feld & Jason Mendelson’s Venture Deals: Be Smarter Than Your Lawyer And Venture Capitalist. As the authors make clear in the book’s preface, their goal is to create a “definitive guide to venture capital deals” and “demystify the venture capital financing process.” Their primary intended reader is a “first-time entrepreneur”, but clearly other stakeholders within the startup universe can also benefit from the book’s hands-on advice.

Even though I have raised significant venture capital as an entrepreneur and have participated in dozens of transactions as an investor, I still found the book to be informative, especially with regard to the dilutive impact of some of the more onerous deal terms that we avoid at Rincon Ventures.

The Magicians Tells Their Secrets

Brad and Jason have been exposing venture capitalists’ secrets since 2005, when they began writing a blog series on Term Sheets at AskTheVC.

They are both former entrepreneurs and current Partners at Foundry Group, a highly successful, early stage venture firm. If you have not seen the Firm’s recent music video entitled I’m A VC, take a moment to watch it now – it will give you a window into Brad and Jason’s respective personalities and the degree to which they do not conform to the stereotypical stick-up-the-ass venture capitalist. My favorite line in the song is: “I can’t take a leak without people who pitch me”, having experienced similar restroom encounters firsthand.

Things I Loved
• Tactical & Hands-on – Entrepreneurs have limited time to expend reading theoretical business books which do not provide actionable content. In contrast, Venture Deals focuses on pragmatic, tactical advice.

• Jargon Free – It can be difficult to describe a complex subject in simple terms, free of industry jargon. Brad and Jason consistently maintain an approachable, straightforward writing style that allows the reader to readily focus on the content, rather than parsing dense, rhetorical flourishes.

• Attitude – Brad and Jason clearly exhibit an entrepreneur-centric approach to the venture funding process. Their relentless (mostly friendly) mocking of venture capitalists and lawyers adds some welcomed levity to what can be, at times, dry subject matter.

• Examples – The book is filled with text excerpted from actual funding documents, rather than the generic templates usually found in academic textbooks. Each example is explained and guidance is provided regarding to the extent an entrepreneur can and should attempt to negotiate the provision.

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Article Author: John Greathouse

John Greathouse is the author of the hands-up startup advice blog infoChachkie (http://www.infochachkie.com) He has held a number of senior executive positions with successful startups which generated more than $350 million of shareholder value. …

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