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Some VC gyaan

June 25, 2007 · Posted in Entrepreneurship, VC India

When it comes to VC funding, term sheets and such, its a constant learning process for me. I scout the net to find useful information related to VC funding and all the terms and process related to VC funding. I came across two interesting posts related to VC funding and I’d like to share them with you - chances are that you may have already read these.

The myth of 51%

One of the greatest misperceptions in the early stage entrepreneurial world is that control revolves around maintaining greater than 51% ownership in a firm. In many term sheet negotiations, I have seen entrepreneur after entrepreneur focus intently on maintaining majority ownership. While this is key for buyouts when the company is cash flow positive, it is not the key factor with venture deals. How so???

What is series A, series B and series C investment ?

As a company grows, it takes on multiple rounds of investment. This usually constitutes several “classes” of convertible preferred stock, with each designated alphabetically (Series A, Series B, etc). The founders and angel investors often have common stock which is junior to the various preferred stock series.

Another resourceful site related to VC funding is AskTheVC. They touch upon a lot of topics related to VC and the entire VC process.

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2 Responses to “Some VC gyaan”

Nav Chatterji on June 26th, 2007 1:17 am

AskTheVC is awesome, I’d probably also throw in http://www.venturehacks.com (excellent site for term sheet hacks)

My $0.02

Great blog, btw…stumbled across it today.

-nav
pranav on June 26th, 2007 3:46 pm

Nav,

I’ve already referenced venturehacks couple of times earlier. Glad to know you find the blog interesting