Over the last two decades I have helped many companies raise venture capital rounds. Here are some of the lessons I have learned from this. If your company is growing like crazy you will have an easy time fundraising and you can ignore pretty much everything that follows. Put differently, what I am writing here is for companies where the ability to raise money is somewhat in question. Fundraising is selling. You are literally getting money in return for selling a part of your company. Because...

I watched a livestream organized by BLCK VC yesterday. It was incredibly powerful and should be widely seen.

There has been a lot of discussion of whether or not startups qualify for forgivable loans under the Paycheck Protection Program administered by the SBA (part of the CARES Act). I don’t want to rehash the arcana of affiliation rules here but make a totally different point instead: there is a money grab going on right now by some venture backed startups that this program absolutely should exclude. Let me start by writing about the kind of business that I believe this is spot on for: the local ...

Vinod Khosla said yesterday at Techcrunch Disrupt that one of the hardest things for entrepreneurs is to figure out whose advice to trust on what topic. That is spot on because as an entrepreneur you will get advice from just about everyone all the time (including random people you have just met for the very first time who don’t know squat about your product or company). Unfortunately that terrific quote will get buried because of a bunch of other things Vinod said right then, such that a lot...

I love going to the movies and I love science fiction. This summer is bringing a bumper crop of scifi movies (broadly defined). One of the fun aspects for me of going to see a movie is that I will get to see trailers for upcoming movies. Some people seem to dread this part as they just want to get on with the movie they have come to see, but I love trailers. Except when they wind up being spoilers and that’s increasingly a problem. Too many trailers seem to feel the need to reveal pivotal sce...

I often talk to people about how the fundamental premise of our investing at Union Square Ventures is that the Internet is disrupting everything. Sometimes people ask whether that includes Venture Capital. I always answer: Of course it does! It would be more than a bit strange to assume otherwise. In fact, when I compare what it is like for an entrepreneur to fundraise today compared to when I was raising myself for the first time in 1996 it is already completely different. For starters, in 1...

This post is a bit more thinking out loud than usual but I am grappling with what I perceive to be a big change in the startup landscape. Here are some of its symptoms: the return of TV, print and subway ads for Internet companies; Uber subsidizing their drivers to prop up NY supply; Level Up providing free point of sales Android devices; Udacity, Coursera and Minerva all raising large rounds. All of these are in one way or another signs of the return of the capital intensive startup. Histori...

There is no doubt in my mind that venture valuations have become incredibly stretched. I have been thinking about why that is and what will come of it. First off, here are the factors contributing to the stretching of valuations. It starts with the genuine potential for building hugely valuable businesses, which is based on four key factors: 1. The immense possibility for scale on the Internet – global businesses with millions of customers can be created in relatively short time periods. 2. T...

There have been many great posts about the various terms that go into a termsheet for a venture investment. As a result entrepreneurs are much better informed which is a good thing all around. I am still puzzled at times though at the approaches taken by both VC firms and entrepreneurs when it comes to actually negotiating a term sheet. Here are a few things that I have learned. For VCs (I have written about the VC side before, but this seems worth repeating): Behavior during the term sheet p...

When investing in consumer services, we try to be active users of the services. That tends to provide a fair bit of insight about what is working and what is not (as long as one keeps in mind that one may not be the exact target user!). To do something similar for our more developer directed investments, I have long been meaning to build a little project using MongoDB and Twilio. But usually the extremely rare cycles that I have available for code go into fixing something on DailyLit. Over La...