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DEVELOPMENT TOOLS 1 - VERSION CONTROL (Mercurial)
CONTRACTING 2 - TOP 10 EASY SITE CREATOR TOOLS
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CONTRACTING 1 - HOW TO GET IN & OUT OF CONTRACT DEVELOPMENT CONTRACTING 2 - TOP 10 EASY SITE CREATOR TOOLS CONTRACTING 3 - MUST-KNOW SaaS TOOLS FUNDING & LEGAL 1 - HOW TO FUND A STARTUP FUNDING & LEGAL 2 - STARTUP CONTRACTS HIRING 1 - INTRODUCTION TO OUTSOURCING HIRING 2 - FINDING THE FIRM TO HIRE HIRING 3 - MANAGING YOUR NEW OUTSOURCED TEAM HIRING 4 - OFFSHORING HIRING 5 - BUILDING A TEAM
- FUNDING & LEGAL 2 - STARTUP CONTRACTS
FUNDING & LEGAL 2 - STARTUP CONTRACTS
First off, Silicon Valley VCs don't invest in LLCs. So you will need an Inc. The second gotcha you need to know as an entrepreneur is that it’s not just about the percent of equity you own. Read the below article from Techcrunch:
http://techcrunch.com/2011/07/25/one-book-every-entrepreneur-and-vc-should-own/
Take note of this line from that article:
"VCs are anal about things like voting thresholds, seniority of their stock, protective provisions, etc. – entrepreneurs never seem to focus on anything other than ownership percentage."
There’s a reason VCs are concerned about all these other details. Imagine you have stock in a company and you aren’t able to sell it when you want to, and you basically are last in line to be able to sell it.
So you need to get yourself versed in all the common terms that can and should appear in these contracts. If you know them, you can use them to your benefit.
That said, there are popular standardized contracts used in Silicon Valley. Here are the 2 biggest ones:
1) Created by The Funded:
http://techcrunch.com/2009/08/23/the-funded-publishes-ideal-first-round-term-sheet/
http://www.docstoc.com/docs/10303638/FFI---Plain-Preferred-Term-Sheet
2) Created By Y Combinator:
http://techcrunch.com/2008/08/13/y-combinator-to-offer-standardized-angel-funding-legal-docs/
http://www.ycombinator.com/seriesaa.html
You should also read the following two related articles from New York’s most famous tech VCs (Chris Dixon and Fred Wilson):
http://www.avc.com/a_vc/2009/08/the-ideal-first-round-term-sheet.html
http://cdixon.org/2009/08/16/ideal-first-round-funding-terms/
The whole purpose of these contracts is not to go on forever and nail the must-haves for a first round of funding, but there are some complex clauses you may not be familiar with. Read them, absorb as much as you can, and google the points you don’t understand. It’s ultimately pretty basic.
Related Entries
- CONTRACTING 1 - HOW TO GET IN & OUT OF CONTRACT DEVELOPMENT
- CONTRACTING 2 - TOP 10 EASY SITE CREATOR TOOLS
- CONTRACTING 3 - MUST-KNOW SaaS TOOLS
- FUNDING & LEGAL 1 - HOW TO FUND A STARTUP
- FUNDING & LEGAL 2 - STARTUP CONTRACTS
- HIRING 1 - INTRODUCTION TO OUTSOURCING
- HIRING 2 - FINDING THE FIRM TO HIRE
- HIRING 3 - MANAGING YOUR NEW OUTSOURCED TEAM
- HIRING 4 - OFFSHORING
- HIRING 5 - BUILDING A TEAM
SMM 3 - FORMULA TO FIND INFLUENCERS