Vc 101: Understanding Venture Capital Deals And Term Sheets

#1 course for VCs and entrepreneurs looking to master term sheets and negotiate the best deals. Taught by a Wharton MBA.

What you'll learn

Become familiar with the NVCA term sheet that shapes an early stage funding round

Understand the economic and control provisions of the term sheet and the mechanics behind them

Important terms to negotiate for entrepreneurs for the best outcomes

How VC returns are affected by term sheet provisions

Company Valuation

Liquidation Preferences

Employee Stock Option Pool

Warrants

Antidilution

Convertible Debt

Board of Directors

Dividends

Investor Rights

Requirements

No prior experience needed, just a general understanding of the startup journey. We'll do the rest!

Description

Welcome to VC 101! This course is for entrepreneurs, aspiring venture capitalists, aspiring venture attorneys, and other groups that are interested in understanding the nuances of venture capital deals.I’ve worked with several early-stage founders and assisted in developing their businesses in order to raise a financing round. One thing I noticed consistently is that although the founders were experts in their industry, they usually needed assistance in understanding the structure of a financing round. Understanding venture financings can be complicated, so I created this course to make it as simple as possible and easy to digest.In this course, we will take a deep dive into the structure of venture capital deals. We’ll discuss at length the details of the term sheet, the document that lays out the structure of the venture deal. Some important concepts we’ll walk through include:Company Valuation (on a pre-money and post-money basis)Liquidation PreferencesEmployee Stock Option PoolsWarrantsAntidilutionConvertible DebtBoard of DirectorsDividendsInvestor RightsBy the end of this course, you will understand the fundamentals of the term sheet, the meaning of core provisions, and a few negotiating tips to improve the deal for you and your team. The venture math can get a bit complex, so feel free to rewatch a few videos and practice different scenarios to solidify your understanding. Cheering for your success - good luck!

Overview

Section 1: Introduction

Lecture 1 Introduction

Lecture 2 What You Will Learn

Lecture 3 What is a Term Sheet?

Lecture 4 Economics & Control

Section 2: Economics

Lecture 5 Valuation & Price

Lecture 6 Fully Diluted

Lecture 7 Employee Stock Option Pool

Lecture 8 Thanks for Your Support!

Lecture 9 Negotiating the Option Pool

Lecture 10 Vesting

Lecture 11 Warrants

Lecture 12 Determining a Valuation

Lecture 13 Liquidation Preference

Lecture 14 Liquidation Preference Examples

Lecture 15 Preferences and Participation Post Series A

Lecture 16 Anti-Dilution

Lecture 17 Pay-to-Play

Section 3: Control

Lecture 18 Board of Directors

Lecture 19 Protective Provisions and Matters Requiring Investor Director Approval

Lecture 20 Drag-Along Agreement

Lecture 21 Optional Conversion

Section 4: Other Provisions

Lecture 22 Dividends

Lecture 23 Redemption Rights

Lecture 24 Other Rights

Lecture 25 No Shop Agreement

Section 5: Conclusion

Lecture 26 Conclusion & Thank You

Startup founders looking to raise a funding round,Aspiring venture capitalists looking to sharpen their dealmaking skills,Aspiring venture attorneys looking to deepen their grasp of the legal aspects of a venture deal