Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist

Our best advice to entrepreneurs on maximizing price is to focus on what you can control and get several different VCs interested in your financing.

there really are only two key things that matter in the actual term sheet negotiation—economics and control.

focus on a length of time you want to fund your company to get to the next meaningful milestone.

your lawyer is a reflection on you. Your reputation in the start-up ecosystem is important, and a bad or inexperienced lawyer will tarnish it.

being able to say “I'm at $400,000 on a $500,000 raise and we've got room for one or two more investors” is a powerful statement to a prospective angel investor since most investors love to be part of an oversubscribed round.

There are specific SEC rules around accredited investors and you should make sure that each of your angel investors qualifies as an accredited investor or has an appropriate exemption.

an institutionalized super angel, which is starting to be known as a micro VC.

If the lawyers are unwilling to agree to a modest fee cap, you should question whether they know what they are doing.

In a pay-to-play provision, investors must keep participating proratably in future financings (paying) in order to not have their preferred stock converted to common stock (playing) in the company.