Monday, December 17, 2012

Book Review: Venture Deals

I'd had Brad Feld's book on my to-read list for some time after I started reading his blog (which is worth subscribing to). I got hold of it recently and put it into the pile of stuff I'm trying to worth through by end of year. It was pretty easy to digest so I made short work of it.

Venture Deals comes from a unique perspective as Feld and Jason Mendelson (his coauthor) have both been on the receiving end of VC deals before going on to become VCs themselves. As such, they call out common pitfalls on both sides of deals that get put together, and explain the motivations and responsibilities for both parties. The bulk of the book is a walk through typical terms of term sheets and letters-of-intent. This part is really good as they make the legalese digestible while still explaining what the different clauses are for and what can go wrong with them if not handled properly.

I'll can't give the book a perfect rating as it has a couple shortcomings. First, I'd like to see it address how the VC space is evolving. They do discuss the ebb and flow between times of bullishness and conservatism, but I'd like to see things like the crowdfunding act addressed, etc. Second, they give a little lip service to legal differences in different states, but the book doesn't talk about differences in VCs in different regions/countries. A good appendix would have been made of interviewing a VC based in, say, London or Paris or Dubai. Third, the disparaging tone they use when speaking about lawyers goes beyond the standard lawyer jokes and grates on the nerves after a while. Finally, even in Silicon Valley, there are different motivations for different VCs. For example, Intel and Google both have venture arms who's motivations are broader than just making money (they often have some strategic alignment with their parent corporation).

These things aside, the book is an easy read and a good intro to venture deals.

Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist

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