The Entrepreneur's Library

Resources Home > Funding Your Business > Funding Mechanics & Deal Structure

FUNDING MECHANICS & DEAL STRUCTURE


Websites

    Articles
    • Anatomy of a Term Sheet
      Venture Capital: An overview of trends, strategies, and structural issues. Note that this is a little dated - see the "Term Sheet for First Round Venture Capital" below for something a little more recent, although less detailed.
    • SBIC Financing, Step-by-Step
      This article explains the mechanics of pursuing SBIC money. SBIC's are private venture capital firms licensed by the Small Business Administration.
    • Term Sheet Definitions
      Common term sheet terminology defined.
    • Term Sheet for First Round Venture Capital
      This article describes, and links to, a model entrepreneur-friendly term sheet. One of the goals is to reduce the amount of time and money that goes into term sheet negotiations. The article briefly describes the rationale for eliminating participation with preferred stock, imposing a 1x liquidation preference, and enacting a single trigger vesting acceleration upon acquisition.
    • The True Costs of Raising Money
      "You probably don't have a clue what it really costs to raise the capital you need to fund your business. This expert spells it out for you."
    • Understanding Convertible Loans
      "Before you borrow funds with a convertible loan, make sure it's a positive move for the future of your business."
    • Understanding the Financing Stages
      "From seed stage to mezzanine, a breakdown of the key financing terms and what they mean to you."

    Tools & Utilities
    • High Tech Startup Valuation Estimator
      Wondering what your pre-money valuation will be if a VC ever puts a term sheet on the table? Answer the following questions, and we'll calculate an approximate range for you. Of course, every situation is different, so your mileage may vary.
    • Sample Angel Investor Term Sheet
      Preferred stock private placement term sheet used by Silicon Valley's Band of Angels.
    • Sample Bridge Loan Promissory Note
      Sample (and simple) promissory note sample used by Silicon Valley's Band of Angels.
    • Series A Equity Financing Documents
      The law firm of Wilson Sonsini Goodrich & Rosati prepared a set of legal documents to support angel financings on behalf of Y Combinator. Y Combinator has graciously released these documents into the public domain (or "open source" as they call it). Be sure to read the disclaimers and have your securities attorney involved if you choose to use these documents.
    • Term Sheet Generator
      The Silicon Valley law firm of Wilson Sonsini Goodrich & Rosati has developed an online term sheet generator. "This tool will generate a venture financing term sheet based on your responses to an online questionnaire. It also has an informational component, with basic tutorials and annotations on financing terms. This term sheet generator is a modified version of a tool that we use internally, which comprises one part of a suite of document automation tools that we use to generate start-up and venture financing-related documents."

    Books
    Term Sheets & Valuations   Term Sheets & Valuations
    Alex Wilmerding

    An Inside Look at the Intricacies of Venture Capital Term Sheets & Valuations



    The Entrepreneur's Guide to Business Law   The Entrepreneur's Guide to Business Law
    Constance E. Bagley and Craig E. Dauchy

    A comprehensive, plain-English overview of the major legal issues that entrepreneurs need to be aware of. The time you invest in reading this book will pay for itself many times by helping you avoid common mistakes and better utilize your attorney's time.



    Venture Management Handbook   Venture Management Handbook
    Cliff Conneighton

    An entrepreneur’s practical guide to stock, finance, and contracts.





    Disclaimer: Inclusion in this directory does not constitute an endorsement. The materials linked to from this page are copyrighted to their respective owners.