An engaging guide to excelling in today's venture capital arena Beginning in 2005, Brad Feld and Jason Mendelson, managing directors at Foundry Group, wrote a long series of blog posts describing all the parts of a typical venture capital Term Sheet: a document which outlines key financial and other terms of a proposed investment. Since this time, they've seen the series used as the basis for a number of college courses, and have been thanked by thousands of people who have used the information to gain a better understanding of the venture capital field. Drawn from the past work Feld and Mendelson have written about in their blog and augmented with newer material, Venture Capital Financings puts this discipline in perspective and lays out the strategies that allow entrepreneurs to excel in their start-up companies. Page by page, this book discusses all facets of the venture capital fundraising process. Along the way, Feld and Mendelson touch on everything from how valuations are set to what externalities venture capitalists face that factor into entrepreneurs' businesses. Includes a breakdown analysis of the mechanics of a Term Sheet and the tactics needed to negotiate Details the different stages of the venture capital process, from starting a venture and seeing it through to the later stages Explores the entire venture capital ecosystem including those who invest in venture capitalist Contain standard documents that are used in these transactions Written by two highly regarded experts in the world of venture capital The venture capital arena is a complex and competitive place, but with this book as your guide, you'll discover what it takes to make your way through it.
Q&A with Co-Authors Brad Feld and Jason Mendelson
Co-Author Jason Mendelson I understand that VCs have primarily four functions they perform: raising funds, screening and investing in new businesses, managing current portfolio companies and some level of investor relations and internal operations. How do you divide your work day?
One of the great things about this job is that there is no “standard day.” Every day is different and the division of time reflects that. It's really hard to say what a typical day is like. Even typical weeks are hard to describe. It all depends on a particular partner's portfolio is doing and what their role is in the firm.
Some partners have operational responsibilities internal to the firm itself, some don't. In short, you could ask 100 VCs this answer and have 100 different answers. If you forced me to put some percentages on the table, I'd say a normal yearly time allocation (assuming that fundraising is not happening) might look something like this:
Screening, Analysis and Execution: 45%
Current Company monitoring: 45%
Investor Relations / Operations / Other: 10%
With a number of great companies being born of ideas coming from a youthful group of entrepreneurs, what advice do you have for the young person seeking to build a team of "time-tested, battle-hardened" professionals?
We think young-entrepreneurs are great. In fact, we like spending time with the younger set so much that we are active mentors and investors with Techstars. And certainly with our fund, we wouldn't hesitate to fund a first-time entrepreneur with a great idea.
Co-Author Brad Feld
I think the key to being a young entrepreneur is being self aware. Know what you know and also know what you don't. If you can communicate to a prospective investor that you are smart, have a great idea AND are emotionally intelligent and realize what other skills sets you'll need to surround yourself with, then I don't think being young and / or inexperienced will hurt your chances. In fact, youthful exuberance is infectious and sometimes younger folks will think outside the box more often than older ones who are set in their ways.
Are you aware of any VCs that have funded founders that have failed at their previous ventures?
Absolutely. Me! And many other VCs. Failure is a normal part of entrepreneurship which I've written about extensively in my blog.
My favorite entrepreneurs to fund are those that have had at least one success and one failure. While it is a cliche, failure teaches the big lessons. Most importantly, entrepreneurs that have some failure under their belt have humility and perspective that I think is deeply useful in the creation of the company.
There is a perspective – promoted by some people – that the best serial entrepreneurs have never been unsuccessful. This is a myth – the vast majority of successful entrepreneurs who I know have a long string of failures in their past.
Why don't VCs invest in real estate?
We don’t invest in real estate because we don’t know what we are doing in that market. Okay, that was a little glib, but it’s true. VCs don’t / shouldn’t invest in sectors and themes that they don’t understand. Outside of some folks that I know who made some shrewd residential moves with their personal properties, I’d not want to trust my money to a VC doing a pure-play real estate deal.

“There are at least two kinds of games,” states James P. Carse as he begins this extraordinary book. “One could be called finite; the other infinite.”
Finite games are the familiar contests of everyday life; they are played in order to be won, which is when they end. But infinite games are more mysterious. Their object is not winning, but ensuring the continuation of play. The rules may change, the boundaries may change, even the participants may change—as long as the game is never allowed to come to an end.
What are infinite games? How do they affect the ways we play our finite games? What are we doing when we play—finitely or infinitely? And how can infinite games affect the ways in which we live our lives?
Carse explores these questions with stunning elegance, teasing out of his distinctions a universe of observation and insight, noting where and why and how we play, finitely and infinitely. He surveys our world—from the finite games of the playing field and playing board to the infinite games found in culture and religion—leaving all we think we know illuminated and transformed. Along the way, Carse finds new ways of understanding everything, from how an actress portrays a role to how we engage in sex, from the nature of evil to the nature of science. Finite games, he shows, may offer wealth and status, power and glory, but infinite games offer something far more subtle and far grander.
Carse has written a book rich in insight and aphorism. Already an international literary event, Finite and Infinite Games is certain to be argued about and celebrated for years to come. Reading it is the first step in learning to play the infinite game.