recently rated:

Rated by 27

4.0 3.7 2.8 2.8 3.4

3.3

Index Ventures

Certified

$$$$$ Geneva, Europe

top rated funds:

Rated by 13

3.0 3.8 3.5 3.2 3.4

3.4

Fidelity Growth Partners Europe

Certified

$$$$$ London, Europe

Rated by 16

3.9 3.6 3.1 2.9 3.5

3.4

GRP Partners

Certified

$$$$$ Los Angeles, US West

Rated by 17

3.5 3.4 3.4 3.5 3.2

3.4

Scale Venture Partners

Certified

$$$$$ Foster City, US West

Rated by 27

3.6 2.9 2.9 3.9 3.2

3.3

The Founders Fund

Certified

$$$$$ San Francisco, US West

Rated by 39

3.4 3.4 2.9 3.4 3.5

3.3

Polaris Venture Partners

 

$$$$$ Waltham, US East

Rated by 15

3.8 3.1 2.9 3.2 3.6

3.3

Azure Capital Partners

Certified

$$$$$ San Francisco, US West

Rated by 10

3.2 3.2 3.2 3.5 3.4

3.3

Adams Capital Management, Inc.

 

$$$$$ Sewickley, US East

Rated by 10

3.6 3.4 3.2 3.0 3.2

3.3

Noro-Moseley Partners

Certified

$$$$$ Atlanta, US East

Rated by 38

3.0 3.6 3.3 3.0 3.5

3.3

Hummer Winblad Venture Partners

Certified

$$$$$ San Francisco, US West

Rated by 23

3.3 3.4 3.0 3.4 3.3

3.3

Allegis Capital

Certified

$$$$$ Palo Alto, US West

Rated by 48

3.6 3.2 3.2 3.0 3.7

3.3

Bessemer Venture Partners

Certified

$$$$$ Larchmont, US East

Rated by 38

3.6 3.4 3.3 3.1 3.3

3.3

Foundation Capital

Certified

$$$$$ Menlo Park, US West

Rated by 34

3.4 3.5 3.2 3.2 3.4

3.3

InterWest Partners

Certified

$$$$$ Menlo Park, US West

Rated by 14

3.6 3.5 3.5 2.8 3.4

3.3

Meritage Funds

Certified

$$$$$ Denver, US West

Rated by 47

3.5 3.5 3.0 3.0 3.2

3.2

Mayfield Fund

 

$$$$$ Menlo Park, US West

Rated by 10

2.6 3.4 3.6 3.2 2.9

3.2

Palomar Ventures

 

$$$$$ Santa Monica, US West

Rated by 25

3.4 3.1 3.0 3.3 3.1

3.2

Sigma Partners

 

$$$$$ Menlo Park, US West

Rated by 31

3.1 3.1 2.9 3.2 3.4

3.2

BlueRun Ventures

Certified

$$$$$ Menlo Park, US West

Rated by 33

2.9 3.3 3.4 3.3 3.2

3.2

Opus Capital

Certified

$$$$$ Menlo Park, US West

Rated by 13

3.0 2.6 3.8 3.3 3.1

3.2

Kepha Partners

Certified

$$$$$ Waltham, US East

Rated by 10

3.6 3.5 3.2 2.2 3.5

3.2

Sequoia Capital Israel

 

$$$$$ Oceanos Hotel, ..., ME / Africa

Rated by 26

3.3 3.3 3.3 2.6 3.1

3.1

Union Square Ventures

 

$$$$$ New York, US East

Rated by 14

3.4 3.2 3.5 2.8 2.4

3.1

Trident Capital

Certified

$$$$$ Palo Alto, US West

Rated by 29

3.6 3.2 2.8 3.1 2.8

3.1

Draper Fisher Jurvetson Gotham Ventures

Certified

$$$$$ New York, US East

Rated by 42

3.8 3.1 2.8 3.1 2.6

3.1

Accel Partners

Certified

$$$$$ Palo Alto, US West

Rated by 20

3.4 2.8 3.1 3.3 2.9

3.1

Sutter Hill Ventures

Certified

$$$$$ Palo Alto, US West

Rated by 22

3.3 3.4 3.2 2.5 3.1

3.1

Emergence Capital Partners

Certified

$$$$$ San Mateo, US West

Rated by 13

3.5 3.2 3.6 3.0 2.1

3.1

Balderton (Benchmark EU)

Certified

$$$$$ London, Europe

Rated by 51

3.4 2.6 3.0 3.1 2.8

3.0

Draper Fisher Jurvetson

Certified

$$$$$ Menlo Park, US West

Rated by 23

3.7 2.6 2.9 2.7 3.0

3.0

Matrix Partners

Certified

$$$$$ Menlo Park, US East

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I just came across these free tools for generating website terms of service agreements and privacy policy agreements.

Great post from Prof. Noam Wasserman at HBS on the legal and tax issues of splitting equity.

It's pretty rare that during a crash and recession there are employees and managers with recent experience on how to handle the situation. Well, the "good news" with the Great Depression 2.0 is that a whole bunch of us have relatively fresh experience. Last time the financial grenade went off in our lap. This time, we're collateral damage, which means it should be less painful assuming similar size crashes (which is looking less and less like a valid assumption).

In any event, here are some lessons I learned from the last time through this mess:

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I always thought it was crazy for early stage companies to take on venture debt. Here's a company that just raised $5MM of venture capital, is burning $300K per month and they think it's smart to raise debt"!" I admit that my view is colored by my one experience raising venture debt in 1999 which did not end well (for anyone). So recently, I decided to take a look at venture debt and talked to about a dozen lenders, quite a few startups and some other industry experts. To my surprise, I found that in some cases, it does make sense.

First, a bit about venture lenders. Various estimates put the number of firms that have serious venture lending businesses at 20-30 in the US. My take is that there are three categories of lenders: (1) banks, (2) dedicated funds with "stable capital" and (3) dedicated funds without "stable capital." By stable capital, I mean a fund that raises capital from limited partners similar to a venture capital fund. The capital is committed for a specific period of time (like 5 or 7 years or more). Bank-backed venture lenders are regulated and tend to invest in less risky areas (like capital equipment or receivables financing). Dedicated funds tend to be more aggressive and invest in "growth capital" (more on this later). The permanency of capital is an important factor as this can have an impact on the borrowers stability of capital and the willingness of a lender to work with the borrower should the company hit a rough patch.

For startups, there are three main types of venture debt: (1) equipment financing, (2) receivables factoring and (3) growth capital. There are other types of borrowing (e.g. acquisition financing, but I'm focusing on these three categories for now). Equipment financing is borrowing tied to a specific capex purchase, e.g. building out a NOC. Receivables financing is useful for companies that have material A/R against which they can usually borrow as much as 80-85%. Growth capital (also referred to as "stretch equity") has availability tied to venture metrics and is useful when the startup can use the extra capital to reach specific business benchmarks beyond those achievable with equity financing alone and that will provide a material step up in valuation (or insurance that they meet those already committed to).

Some key terms/rules-of-thumb for venture debt include:

* Availability: A/R factoring - up to 85% of receivables; equipment financing - up to 100% of specific capex; and growth capital - up to the cumulative amount of capital invested by the lead investor (minus any other debt).

* Repayment: 3 to 12 month interest only period followed by up to 36 month interest plus amortized principal period (i.e. up to 48 months).

* Rates: For working capital financing, a good rate would be prime +1% and for growth capital, a good rate would be prime +3%.

* Warrants: Expect 6-12% warrant coverage on growth capital. That means take 6-12% of the loan principal and convert that into an at-the-money warrant to purchase an amount of shares at the price of the last equity round.

* Covenants: With growth capital, you can avoid them (including a "MAC" clause), however, most working capital loans will have them.

The process for raising venture debt is straight forward. The borrower will require some material (which you probably already have from raising your last equity round) including:

* Powerpoint pitch deck
* Financials since inception
* Current cap table
* Board approved forecast
* 1-hour meeting with the CEO to get the "pitch"

After reviewing the materials and the initial meeting above, a lender will issue / negotiate a term sheet. Once accepted, that will be followed by a half-day diligence meeting with the management team, legal documentation and closing. The whole process typically takes 4-6 weeks from term sheet to close.

So in terms of who to borrow from, my assessment is that banks will offer the best price but on the least favorable terms. The dedicated funds will offer the most flexibility, but will cost more. Consequently, I'd go to banks for equipment or receivables financing, but to the dedicated funds for growth capital. If you think you'll need both (i.e. both equipment/receivables financing as well as growth capital), I'd go to the dedicated funds for growth capital first and then work w/ banks to get additional financing later.

http://www.wordstream.com/blog/ws/201...

7 lessons, and most of them are not usual textbook stuff.

http://www.mightymeeting.com/blog/201...

Seed round in 21 days - they did it (via Founders Institute and Venturehacks in part)

No matter how obscure you think something is, or how off-beat a domain name is, never, EVER register the domain and then leave it parked even for a minute.

We just went through the painful process of spending hours and hours until we hit on a cool domain name for our rebranding (sending coupons to mobile phones) -- kupongo.com. Less than 45 days later while we were working up our new look website to launch with it, we got an inquiry from someone about buying it. When we told them we were going to use it for our business... they went and registered kupongo.net and filed a trademark for kupongo in the exact same line of business. Then tried to bully us into selling them the .com domain for $500 because "we wouldn't be able to use it anyway."

Unless they don't actually put it into use (and we can then pursue abandonment), well, we can't use the domain for OUR site.

If we had used the domain at all beforehand, well, we'd have a position. But by trying to be stealthy, and conserve cash...well...it didn't work.

Lesson learned for me...don't let it happen to you!