Group items tagged

"Pilarinos is one of dozens of startup founders who have graduated from a two-year-old boot camp run by First Round, a venture-capital firm that focuses on early-stage tech startups. The two- to six-week program drills its cadets in important lessons that are part Sales 101, part human psychology seminar, and part tutorials on practical tasks like creating slide decks. The goal is to help startup founders, who may have spent months or years engrossed in arcane product details, sell their vision to the people with the money. And in a funding environment in which the easy money has dried up, the CEO boot camp, known as Pitch Assist, could become increasingly critical as startups fight to secure more financing. Going straight for the jugular The coaches at the boot camp, who are basically First Round partners, don't pull any punches. On the first day, CEOs are put on the spot and made to answer the burning questions investors will have - especially the tough questions for which the CEOs might not yet have answers. "Some of the questions are the sort of holes in the business," First Round partner Bill Trenchard said. "No company is perfect. There's always a weak point in the architecture." First Round First Round normally does only seed rounds of fund-raising. Pitch Assist helps those companies go on to raise their next round. Young CEOs aren't used to talking about those holes. No one starts a sales call by going over their weaknesses. When pitching investors, however, those weak points have to be addressed head-on in the presentation. "If you try to play games or try to hide things, any reasonable investor will notice," Brett Berson, First Round's vice president of platform, said. "And once you've lost that credibility, there's no coming back from that." Berson estimates that it takes about two hours of work to go through each question, but after that startup founders can step back and see the overall picture. The questions become the plot points - the m

"SAFE FINANCING DOCUMENTS The safe (simple agreement for future equity) is intended to replace convertible notes in most cases, and we think it addresses many of the problems with convertible notes while preserving their flexibility. In addition to being simpler and clearer, we intend the safe to remain fair to both investors and founders.During its development the safe was positively reviewed by many of the top startup investors. We believe it's a positive evolution of the convertible note and hope the startup community finds it an easier way to accomplish the same goals. Features of a safe: Unlike a convertible note, a safe is not a debt instrument. Debt instruments have maturity dates, are typically subject to certain regulations, create the threat of insolvency, and can include security interests and sometimes subordination agreements, all of which can have unintended negative consequences for startups. Because the money invested in a startup via a safe is not a loan, it will not accrue interest. This is particularly beneficial for startups, but also better embodies the intention of investors, who never meant to be lenders in the first place. As a flexible, one-document security without numerous terms to negotiate, a safe should save startups and investors money in legal fees and reduce the time spent negotiating the terms of the investment. Startups and investors will usually only have to negotiate one item: the valuation cap. Because a safe has no expiration or maturity date, there should be no time or money spent dealing with extending maturity dates, revising interest rates or the like. A safe still allows for high resolution fundraising. Startups can close with investors as soon as both parties are ready, instead of trying to coordinate a single close with all investors simultaneously. There are four versions of safe, corresponding to the four types of convertible note: Safe Primer Safe: Cap, no Discount Safe: Discount, no Cap Safe: Cap

"August 2007 (This is a talk I gave at the last Y Combinator dinner of the summer. Usually we don't have a speaker at the last dinner; it's more of a party. But it seemed worth spoiling the atmosphere if I could save some of the startups from preventable deaths. So at the last minute I cooked up this rather grim talk. I didn't mean this as an essay; I wrote it down because I only had two hours before dinner and think fastest while writing.) A couple days ago I told a reporter that we expected about a third of the companies we funded to succeed. Actually I was being conservative. I'm hoping it might be as much as a half. Wouldn't it be amazing if we could achieve a 50% success rate? Another way of saying that is that half of you are going to die. Phrased that way, it doesn't sound good at all. In fact, it's kind of weird when you think about it, because our definition of success is that the founders get rich. If half the startups we fund succeed, then half of you are going to get rich and the other half are going to get nothing."