For those of you that are
regular readers, you know that as a policy, I don't often do site reviews of
other startup-related websites -- let alone pour gushing praise on a single
one. But, every know and then, I feel compelled to make an
If you're a startup
entrepreneur, head on over to Venture
, read their content and subscribe to their RSS feed. You'll be glad
Disclaimer: I don't know
Nivi and Naval (the guys behind the site) and I have no personal bias or
conflict. I simply love the content on the site.
The reason I like the site
so much is that it provides a rare glimpse into the black box of venture capital
(and venture capitalists). For the most part, the industry is pretty closed and
very few (except insiders) really get a glimpse into the details of the
process. The reason is simple: For those that know enough to write about it,
there' s rarely an incentive to do so. For those that don't know the innards of
the business, you're not going to learn much that you couldn't pick up on your
own through other sources. VentureHacks is the rare case where the authors know
what they're talking about and are brave enough to actually do it. As
an added bonus, they're witty and edgy too.
5 Reasons to Read
1. VC Negotiation
Is An Art Form: As an entrepreneur, there are few things more
"nuanced" that you'll deal with than raising institutional capital. Even if you
decide not to raise venture capital, a lot of these skills and deal-terms will
likely show up in other dealings you have (strategic partners, M&A
2. The Devil's In
The Details: Most entrepreneurs focus too much energy on the "obvious"
things like valuation. Fact is, there are other, non-valuation terms in the VC
deal (vesting, stock option pool, liquidity preferences, etc.) that have a
significant impact on the economics of your deal. It's easy to lure yourself
into thinking you should solve for the highest valuation. But, in most cases,
3. Great Advice Is
Hard To Find: As it turns out, good advice in the VC business is hard
to find. I would define good advice as a combination of competency (i.e. well
informed) and objective (i.e. non-conflicted). You can get close sometimes (via
lawyers, adivsors, etc.) but it's really hard to find great
4. It's Not Enough
To Be Smart: It's importat to remember that regardless of how smart you
are, VC negotiation is not just a matter of raw intelligence. Sure, it helps t
have a few brain cells to understand the dynamics of a deal, but a lot is hidden
away in the dark corners that you only ever learn by doing it. It's also
important to remember that the VCs do this for a living. Hopefully,
you don't (you're building businessees for a living). You may be twice as smart
as they are, but you're still at a disadvantage. Try to even the playing field
as much as you can.
Intellectually Fascinating: Even if you're not planning on raising
funding yourself, I think you might find the whole VC game intellectually
interesting. Further, by getting yourself educated, you can perhaps help
someone else that's a total newbie navigate the waters (See
In short, go read VentureHacks
. It's worth the trip.
Nivi/Naval: If one of you stumbles into this blog article somehow, drop me a
line. As a small token of appreciation, dinner's on me.
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