recently rated:

Rated by 4

3.8 4.0 3.5 3.8 4.3

3.9

Total Technology Ventures

 

$$$$$ Atlanta, US East

top rated funds:

Rated by 15

3.8 3.7 4.1 4.1 4.0

3.9

Maples Investments

Certified

$$$$$ Menlo Park, US West

Rated by 33

3.9 4.2 3.5 3.8 4.3

3.9

RRE Ventures

Certified

$$$$$ New York, US East

Rated by 48

3.9 3.8 3.9 3.6 4.0

3.8

First Round Capital

Certified

$$$$$ San Francisco, US West

Rated by 22

3.3 4.1 3.9 3.9 3.8

3.8

Leapfrog Ventures

Certified

$$$$$ Menlo Park, US West

Rated by 25

3.9 3.7 3.8 3.3 4.1

3.8

Altos Ventures

Certified

$$$$$ Menlo Park, US West

Rated by 11

4.1 3.3 4.1 3.6 4.0

3.8

Aberdare Ventures

 

$$$$$ San Francisco, US West

Rated by 51

3.8 3.6 3.4 3.5 4.0

3.7

Trinity Ventures

Certified

$$$$$ Menlo Park, US West

Rated by 11

3.8 3.8 3.8 3.1 3.8

3.7

Meritage Funds

Certified

$$$$$ Denver, US West

Rated by 11

3.4 3.7 3.9 2.9 4.2

3.6

406 Ventures

Certified

$$$$$ Boston, US East

Rated by 14

3.8 3.6 3.4 3.6 3.8

3.6

Scale Venture Partners

Certified

$$$$$ Foster City, US West

Rated by 22

3.2 3.5 3.4 3.5 3.9

3.5

Opus Capital

 

$$$$$ Menlo Park, US West

Rated by 24

3.5 3.6 3.5 3.1 3.5

3.5

Union Square Ventures

 

$$$$$ New York, US East

Rated by 22

3.2 3.7 3.9 3.7 3.3

3.5

True Ventures

Certified

$$$$$ Palo Alto, US West

Rated by 39

3.6 3.4 3.4 3.2 4.0

3.5

Bessemer Venture Partners

Certified

$$$$$ Larchmont, US East

Rated by 18

3.9 2.9 3.1 3.9 3.3

3.4

The Founders Fund

Certified

$$$$$ San Francisco, US West

Rated by 12

3.8 3.7 3.0 2.8 3.6

3.4

Versant Ventures

 

$$$$$ Menlo Park, US West

Rated by 20

3.5 3.4 3.0 3.6 3.5

3.4

Sigma Partners

 

$$$$$ Menlo Park, US West

Rated by 42

3.6 3.5 3.0 3.1 3.4

3.3

Mayfield Fund

 

$$$$$ Menlo Park, US West

Rated by 11

3.9 3.1 3.5 2.8 3.1

3.3

Insight Venture Partners

 

$$$$$ New York, US East

Rated by 25

4.0 3.5 2.8 3.0 3.2

3.3

Index Ventures

Certified

$$$$$ Geneva, Europe

Rated by 12

3.3 3.3 3.5 3.1 3.2

3.3

August Capital

 

$$$$$ Menlo Park, US West

Rated by 26

3.7 3.3 2.9 3.3 3.0

3.3

Draper Fisher Jurvetson Gotham Ventures

Certified

$$$$$ New York, US East

Rated by 35

4.1 3.4 3.0 2.9 3.2

3.3

Greylock Partners

Certified

$$$$$ San Mateo, US West

Rated by 30

3.3 3.5 3.1 3.0 3.4

3.3

InterWest Partners

Certified

$$$$$ Menlo Park, US West

Rated by 10

3.1 3.4 3.3 3.2 2.9

3.2

Oak Investment Partners

 

$$$$$ Westport, US East

Rated by 14

3.3 3.2 3.1 3.0 3.2

3.2

Gemini Israel Funds

Certified

$$$$$ Herzliya, ME / Africa

Rated by 18

3.7 3.4 3.3 2.7 2.7

3.2

Morgenthaler Ventures

 

$$$$$ Menlo Park, US West

Rated by 31

2.8 3.1 3.5 3.3 3.4

3.2

Shasta Ventures

Certified

$$$$$ Menlo Park, US West

Rated by 18

3.4 3.3 3.4 2.4 3.2

3.2

Emergence Capital Partners

Certified

$$$$$ San Mateo, US West

Rated by 37

3.2 3.0 3.0 3.0 3.3

3.1

Spark Capital

 

$$$$$ Boston, US East

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Entrepreneurs always talk about the pitch. A Mike Tyson knock out pitch can get you another meeting, but what about after the pitch? How about before? Hell, how about from the moment you step off your front porch to the second you return?. A 24/7 game face will drive you to the promise lands 3x faster than simply wielding the magic when you've got the mic. Here are 3 tips I've found to work wonders before, during, and after the pitch.

1. Smooth entry. VC's and angel's alike will judge you from the second the tip of your polished shoes crosses that door jam. Chin up, calm stride, and eye contact from the moment you have a line of sight. If you've done your research you'll know exactly what their hobbies are, portfolio consists of, and hopefully a mutual acquaintance you can reference off the bat. Don't hold it for longer than a minute. They want to see that your personable, but professionalism and punctuality are key. Make a point to note that you have another pitch later that day that starts 2.5 hours from now. They need to know that you're sought after, busy, and they aren't the only duck in the pond.

2. Practice your pitch in front of a mirror starting with the entry. Everyone looks foolish when they're putzing with the projector, so practice the pitch from the top with a computer and projector handy. It detracts from the great introduction you just made, and allows them to push their pencils and think about how badly they want to get home to watch Jack Bauer in 24. From the moment you've loaded the deck you should be on fire. Eyes lit, smile wide, and rotating eye contact the entire show. VC's and angels invest in entrepreneurs, not companies. They need to feel your fire, align with your mission, and ultimately know that you are the captain that can navigate their $ to $$$$$. Vary your tonality, conduct the tempo of the pitch, and ultimately you will command their attention and peak their interest. Mr. Smith has a great post on the 5 rules of pitching. I highly recommend it.

3. Do not, and I repeat, DO NOT leave right after questions. Get your business cards into their hands, have a quick chat, and get that 2nd meeting. How many VC's or angels can acutely assess how bad ass your opportunity is in one 10-20 minute pitch? Very few. If you didn't give them enough kick in the pitch, that's your fault and they'll simply want you out the door as quickly as possible. But if you did your job in the pitch, they've either got a "yes" in their head and you'll be invited back anyhow, or they have a "well we've got a ton of other deals to look at. This one's good, but I need more." More often than not it's the second one, and that's a result of the massive entrepreneurial talent here in the Valley.

A 24/7 Game Face can make the difference between getting the 2nd meeting and being shown the door. If you can't stand behind your vision with pride, confidence, and flare, no one else will, even if they'd like to.

Getting a meeting with an investor is hard these days, but it can be done. Once in a meeting, here are five strategies to make the meeting go well:

>> STICK TO THE FACTS
Sell your idea on factual information only. Avoid adjectives and superlatives whenever possible. You do not have the best, the most, or the greatest anything. Most investors see 2,500 deals per year. They need basic information to determine interest. Suspect information is a red flag, and it only takes one red flag for an investor to lose interest.

>> KEEP YOUR PITCH SHORT
You should be able to explain your company in 10 slides that take about 20 minutes to present. If you want to succeed, then videotape yourself giving the pitch. Watch the video and write down everything that you want to improve in a list. Repeat this process until you are happy with the results. At the end of your pitch, say: "does anyone have questions that I can help you with?" The shorter your pitch, the more questions that will you have, and more questions are good.

>> ANSWER EVERY QUESTION BRIEFLY
Answer every question with one or two sentences and with as few words as possible. Uncomfortable silence is a tool that you can use to elicit another question. If you do not have or know an answer, say: "I don't recall the answer to that off the top of my head, can I look it up in my files and get back to you through email." Questions are an excellent sign of interest and engagement. When an investor gets into 'question mode,' they usually have a series of 5 to 10 questions that they need answered quickly to evaluate the opportunity. You are doing well in a pitch when the investors are talking.

>> ASK FOR FEEDBACK AND TAKE NOTES
Make sure to leave a few minutes to collect feedback. Ask the investors, 'do you have any recommendations for the business?' Have a pen and paper out, and write down everything that the investors say. It's a common courtesy to take notes, and it is expected. After an investor says something, say 'thank you.' Do not get defensive. Nothing sours a relationship faster than getting into a debate.

>> BE AN EXPERT IN YOUR INDUSTRY
You should read every recent blog post and know about every key development in the primary industry and all related industries to your idea. It is very likely that an investor will have seen and researched a very similar idea within the last 45 days. It is also very likely that this investor will ask you about mundane developments or other companies in the field as a test of your knowledge and to show off their own expertise. When confronted, you say, 'Yes, I was aware of that. Thank you.' This will lead to more questions.

As a closing point, be confident and assured. A common misperception is that a deal can be done in one meeting. It usually can't. So, the goal of any meeting should be (1) to get another meeting and (2) to specify follow-up items.

Do members have some other suggestions to add in the feedback?

Anyone have any comments regarding family in companies?

Entrepreneurs build companies and hope to make money.
Investors invest and hope to make money.
Customers buy products and hope to make money.
Advertisers advertise and hope to make money.
Employees work and hope to make money . . . . . . . . .

Using a Finder or Consultant to help you raise money is perfectly OK.

A Finder or Consultant who asks for any money upfront is not OK. If the Finder / Consultant doesn't believe in your product or service enough to base his / her compensation on the successful raising of money - then why should an investor believe in what you are doing.

The only time a Finder or Consultant should be paid is if you need extensive help with your business plan, etc. You can avoid this by creating a Board of Advisors (one of whom can help with your business plan) that would be paid in stock options down the road.

Hi all!

We are self funded, start-up that just coming to market - we have more than 500k of our own money. We need to raise about another $500k which has been difficult in this market.

One of the founders has a trust fund that he receives in 3 years and 2 months with significant funds in it when he turns 40.

He is willing to sign whatever documents that we need to back up a loan of 250k for the company and put the trust up -- it's at a very well respected financial management company with more US and state bonds in then money we are looking for. However, he is not willing to let the trustee know that he has done this, so we are having trouble with banks since it can't be "officially" collateralize, but He is totally willing to use it as collateral with major legal documentation.

His issue is dragging the Trustee of the trust into this. Basically, he is not willing to go to his uncle for this. He has asked his uncle to open up the trust for our company and his uncle has said no. So we don't think he will put a lean on the Trust. But the money is his in 3 years and there is a will (which is the trust agreement) that legally says so.

We are looking for a creative solution to a loan. Any thoughts on who we can talk to about this opportunity that might be open to it. We are talking to a couple people in the angel world to help us out, but are looking for others to talk to as well.

We have a real business, with real customers fwiw. And $500k should take us to profitability

Thanks for any advice.

One of my board directors proposed to help us fundraise using his influence in the VC community. He suggested a 3% finder's fee with a few stock options on top for funds raised through his introduction. I understand the typical finder's fee for investment bankers is in the range of 6% to 7%. Is my board director's proposal reasonable?

For those of you who founded the company and are not the current ceo, please offer insight as to how you approach board meetings (you are on the board as a founder or common stock rep and are a member of the management team). See private for more details

The New York Times ran an article on the role of the business plan in venture funding. Seems to confirm the general wisdom, but interesting anyway.

http://www.nytimes.com/2009/05/14/bus...

I saw a blog post by Georges van Hoegaerden titled, "Idiot CEOs." Here is the link:

http://www.venturecompany.com/opinion...-entry-id-148

A very amusing post that makes us CEOs think about financing alternatives to VCs.

Your thoughts?

The vultures are coming out of the woodwork.

I've mentioned this survey several times before, but this time I bring news of the 2009 survey opening to participants. This year the survey covers five countries (China, India, Israel, UK and US) in two industries (technology and life sciences). If you are CEO or CFO of a startup company in any of these countries/industries then I encourage you to participate in the survey. It doesn't cost anything to participate (other than the 30-60 minutes it takes to complete the survey) and the benefit is that you get the full results once they are published.

In years past, the results were published in a PDF and a hardcopy book, but starting in 2009 the results will be published online via a password protected, members-only site (so participating is really the only way you can get the results). I think the 2009 data will be very interesting as it will reflect the effects of the overall economy as well as provide global comparisons. Don't miss the opportunity to get the 2009 data...take the survey now!

If you haven't seen the results of this survey before, I'm including both of last year's unabridged reports results below. It's actually pretty simple, yet since the data is otherwise so hard to find it's pretty powerful. Basically the survey collects salary, cash bonus and equity information for the top executives in private companies (mostly venture- and preventure-backed companies). The survey also collects information about the background of the executives and of the company (like location, size, funding, industry, etc.). The report is then able to give ranges of compensation based on these attributes.

Read more here including access to the full 2008 compensation survey reports.

Today Wilson Sonsini is launching an online term sheet generator. It's actually really cool and quite helpful in understanding the key terms. I actually got a sneak peak a few weeks ago and wrote a review here.

I would like to get your input and advice on what to do: buy time with unfavorable terms of a bridge / convertible loan, or ???

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

We are a start-up digital and social media, talent management and branding company. We have at least 9 revenue streams which are viable and are currently producing money. We are projected to turn a profit in year 2 and reach over $20M in revenues by year 5. We have a agreement with a large media company to produce content for their site and network. At this stage, we have a bank that is willing to give us a line of credit for $400K however we need a guarantor to approve the line. We have offered potential investors 10-20% of company equity and to pay off the line within 3yrs on a 10 yr loan. In year 3 we'll even offered to buy any investor out with a 25% ROI on the $400k line. Furthermore, any investor wouldn't have to put any money down but its a case where the bank will look at an investors company or personal assets to insure the line. We have came close to sealing the deal with few a investors but we haven't closed on any yet. Is there anything we can do to sweeten the deal?

So we're producing The NYC Entrepreneur Week - www.nycentweek.com and are actively engaged in discussions with the city about ways to spur entrepreneurship in New York. Any thoughts, ideas etc...?

Some ideas that have come up...

Idea 1: Tax incentives. they give tax incentives for films saving huge amounts of money and films aren't even sustainable. Give tax incentives to investors (including founders who invest their own money).

Idea 2: City should start a ycombinator type program with each of the main schools in town (Columbia, NYU, Fordham, Pace). Give them each $100,000 a year in grants and build a mentor network to tag along.

Idea 3: Provide matching loans to startups. Ie: founder personally puts in $50k, city will lend up to $50k to the company at market rates. City could take equity kicker and put it in an evergreen fund.

Idea 4: Support a citywide job board for startups and entrepreneurship fair.

This is a repost from a blog that is going live on Monday morning on Bootstrapper.com, I figured I would post it here first...

So today's post is about a topic near and to everyone in our community, The "inlaws". By that I mean the inherent conflict of interest that tends to occur within the legal community in relation to the venture community. I've gotten to know a number of lawyers in the community quite well over the last few years and have a lot of respect for them and are friends with a number of lawyers, however it is a small community and an interesting thing that occurs is that the same law firm can and often does represent both sides in a transaction (either directly or indirectly). What do I mean? Well, a law firm can represent a fund in one deal and the entrepreneur in another and both be going on simultaneously. It creates a confusing situation.

Outside of the venture sphere, the situation could be seen as a conflict of interest but given our world, it is standard practice. Often times the lawyer may be the one that introduced the company to the investor which is great for both parties but further complicates the question of representation.

The founding member of The Funded always likes to say that the lawyers work for the fund not for you and that the second $ is closed, it is no longer your counsel.

Given that the fund represents (generally) infinitely more business than a single entrepreneur, there is a point in there. On a technical level corporate counsel represent the controlling shareholder or bloc of shareholders but on a practical level it's something to think about.

Overall, it's usually good to have a venture law firm for your company because they do tend to know how to raise money and the process, however it may make sense to have a personal counsel review everything for how it looks from your perspective as the entrepreneur because you want someone looking at your docs that is representing you personally, not your company.

To conclude: Cover Your Ass no matter what you do - I've been screwed out of vesting and know many entrepreneurs who have as well. Protect yourself and make sure you have protections in place.

So the NYC investment climate is going through serious issues. The angel market has drastically changed as most angels are from the world of finance and no longer have disposable investable cash and the few angel deals that are getting done are at far lower valuations. On the venture side, 'risk' is not being funded. Unless you have revenue (and don't need money) or extreme traction it's probably not worth the time raising money. Sure people who have made money for that exact investor in the past can still raise some money but beyond that, unless you're 'perfect' you'll have a hard time. Even then expect 2-3X liquidity preference, restrictive employment agreements and flat to down rounds even for high growth companies. I saw a company that is trending towards $20MM in revenue in a high growth category doing a flat round at a 3X liquidity preference. Times are tough. Time to call on the old friends and family and Bootstrap. It will not be fun. Still talk to investors and get coverage so they know you so if you happen to hit a stroke of luck or genius and take off, you can create some competition and maybe get decent terms but don't expect to easily raise money. Sure, you can get meetings and maybe even some feedback, don't expect an easy check from angels or VC's in NYC. Seed Capital has been crushed, Angel money is crushed and Series A money is trending towards Series B money or to pump into existing companies or entrepreneurs proven to that investor.

With all that said, always keep pitching but Bootstrap your ass off.

I wrote this post on how the VC market is imploding which is not news to anyone on TheFunded, but I tried to take it a step further and talk about what it will look like post recovery. I read a great post on Seth Godin's blog about how everyone talks about the "crisis in our face" but not the "crisis in the distance." Anyway, here's a crack...let me know what you think.

Fellow entrepreneurs, most VCs are unable to complete capital calls and, therefore, are unable to make new investments. This includes everyone from name brand funds to small funds, and it does not matter if they recently closed a new fund or not. If you are pitching a venture fund, there are two critical pieces of information that you need to know before wasting time with meetings, diligence, and faux terms:

- First, has the fund made an investment in a company that was not already in the portfolio in 2009, and, if so, which company?

- Second, has the fund completed a successful capital call in 2009?

Is the answer is 'no' to either of these questions or the fund is uncomfortable discussing these matters, then don't bother pitching them and move on. Why? Between the dismal exit history, defecting LPs, worthless secondary markets, and massive position devaluations, venture firms are facing an apocalypse right now. The whole concept of 'venture capital' as an asset class is being re-evaluated by accountants worldwide, and the outcome of that work does not look good for venture capitalists.

I (did not) want to share some resources in the Silicon Valley for serial start up CXOs:
http://www.tiesv.org, http://www.vctaskforce.com, http://www.sdforum.org and http://www.svase.org - the last one runs a weekly "pitch a VC breakfast" each Thursday.

Now that I have seen the dark side of stock rights and the way they can be wiped out for founders, the new startup is being created differently. I am seeking opinions on how others have done it.

[The Founding Member has suggested that this post, originally written in response to a query on the discussion board, be reposted here for broader visibility.]

No web site site can promise to find you money. Period. In fact, perhaps the best way to figure out whether a site is legitimate is the extent to which it DOESN'T promise to find you money!

Of the various possibilities out there, there are realistically four categories, in pretty much the following order:

1) Angelsoft.net: doesn't promise anything, is primarily a site that investors use themselves, doesn't expose any of your information publicly, has by far the best free search engine for legitimate early stage funding sources, and lets you prepare and send applications and videos for free directly to a limited number of screened, legitimate investment groups. If you want to pay $250 extra, you can promote your offering by posting it in a pool that 15,000+ accredited investors (and ONLY accredited investors) can browse through. They publish their stats online, and they show that between 1.3% and 5% of posted deals get funded. So your odds are between 20:1 and 75:1 against. (As Winston Churchill said about democracy: "It's the worst form of government there is...except for all the others.")

2) Vator.tv: the biggest public pitch site, legitimate, but wide open. Good news is that it's free, and that you'll likely get a lot of views of your video. On the other hand, very few of them (if any) will be from legitimate investors. Instead, you'll probably be approached by more than a few service providers, which may (or may not) be what you want, and scammers. But it's good for general exposure, and they are adding a bunch of neat new features, including micro-blogging for company updates so that interested parties can follow your corporate news. So if you're not concerned about the public nature of the site (or if you think that's a good thing), it makes sense. (Just be very, VERY wary of any "funding" leads that result from your posting.)

3) The legitimate attempts at investor matching: there are VERY few of these out there (and virtually all are not in compliance with SEC regulations) including for-profit ones (such as FundingUniverse) and not-for-profits (such as ActiveCapital (the only truly SEC-approved, legit one) and TheFunded's sponsor, IdeaCrossing). They mean well, but have few investors (usually starting from a local group or area: Utah in the case of FundingUniverse, Cleveland, Ohio for IdeaCrossing), and the for-profit ones are not cheap.

4) Everyone else: there are several dozen of these (perhaps even a hundred or more), ranging from out-and-out scams (any one in which you get an instantaneous response promising money, asking for money, or asking for financial information), to sites that function primarily as lead-generators for service providers. I don't personally know of a single company that has had a good experience with FindThatMoney, FundFinder, GoBigNetwork, RaiseCapital, Go4Funding, etc. etc. etc.

The bottom line is that raising capital is very, very (did I say VERY?) tough, particularly in this economy, and only a teeny, tiny fraction of companies will EVER get outside equity financing. The stats suggest that's something like 0.25% for venture money, and 1-2% for angel money.
So anyone who promises you quick and easy money is either well-meaning-but-delusional (the rare exception) or a scumbag-with-a-hand-heading-to-your-pocket (the vast majority.) As a first pass heuristic, if an "angel group" is not listed on either the Angel Capital Association web site (http://www.angelcapitalassociation.or...) or the Angelsoft Group Finder (http://angelsoft.net/entrepreneurs/an...) you should be extremely wary of any claims they make...but then, of course, you would be anyway. Right? Right??

Remember the immortal words of Robert A. Heinlein: "There ain't no such thing as a free lunch."

In the middle of trying to launch a start-up (The Goal Mine), the deepening downturn has pulled me back to a practice (Now Possible) that has become more timely than ever: re-positioning companies.

As I look around the entrepreneurial landscape, what surprises me is how little substantive re-positioning has occurred... yet. The world has shifted, dramatically. The rules have changed. And yet most firms are pretty much still pitching the business model they developed before last fall. 95% of the time, that's not going to work.

This new world creates its own opportunities. All is not gloom and doom, unless you fail to acknowledge how much the rules have changed. Rents are going down. Lots of talent is available. People are willing to take chances (largely because they have no choice.) But at the same time, everyone has both hands on their wallet.

How should your firm re-position itself today? Whatever you decide, that decision should ripple quickly through your pitches, your sales materials, your product/service offerings, and even your pricing sheet.

One thing to keep in mind: hope is not a strategy. Hoping you'll get funding and find customers even though you did not change your positioning, well, that's not much of strategy. Basically, the entire world is taking a 50% pay cut. So what do you do differently?