What We’ve Been Reading

This post is an assembled collection of insights, stories and commentary on startups, venture capital and entrepreneurship.

Zero-sum marketing channels: Good or bad for a startup to pursue?

Many marketing channels are “zero-sum,” meaning that if one company wins a piece of the channel, other companies cannot also use that piece. Jason Cohen looks at whether zero-sum marketing for startups is a good idea in Zero-sum marketing channels: Good or bad for a startup to pursue?

What Startups Can Learn from General McChrystal about Combining Strategy and Execution

 Over at First Round Review, Adam Pisoni interviewed General Stanley McChrystal to see how he helps companies become more effective. They examine one key question: “How do you create a cohesive strategy where many people are executing in unison when the strategy and environment are constantly changing?” Read some of General McChrystal’s thoughts on the subject in What Startups Can Learn from General McChrystal about Combining Strategy and Execution.

Understanding an M&A Term Sheet

 Congratulations! You just received an offer to acquire your company.  A serious buyer will present you with a term sheet that covers the basic terms of the transaction.  Do not make the mistake of agreeing to a term sheet without consulting with your lawyer. Jamie Leigh, Partner at Cooley LLP and blogger at CooleyGo, goes over why it’s important to understand term sheets before you agree to anything in UNDERSTANDING AN M&A TERM SHEET.

Startups are like Patients. They Need Doctors and Hospitals.

I interact with a lot of startups on a daily basis, while they are in various stages of evolution. Often, it feels like being a doctor or running a hospital. That led me to think that startups are a little bit like patients. Some are in the Intensive Care Unit. We’re not sure if they will survive. They need intensive care in order to make it. Every other day someone will come into the Emergency Room, with something urgent that needs to be looked at, either because they had an unexpected accident, or because a problem erupted and they are bleeding. William Mogayar at S-U-M Startup Management examines the analogy of startups and patients in Startups are like Patients. They Need Doctors and Hospitals.

Bartlett’s ‘Get Out of Jail Free’ Card

Joseph W. Bartlett

Various attacks are mounted against the boards and managers of U.S. publicly held companies based on alleged deficiencies in the disclosure of financial results, the prosecution’s case buttressed by a emails discovered in the cloud from disgruntled insiders. The legal issues have been analyzed ad infinitum by the media and legal commentators. There is no effort from this corner to add to that enhanced commentary.

One point, however, strikes me as a prudent prophylactic for public companies and their managers who are reporting valuations and other material information to the marketplace, including but not limited to existing shareholders and creditors.

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Term Sheets and the “Boilerplate” Fantasy

Joseph W. Bartlett

The classic “boilerplate” in a non-binding term sheet (a/k/a a letter of intent or memorandum of understanding) includes express language that the indicative terms are “non-binding” except for such as the paragraphs on confidentiality, no brokers on either side, and responsibility for expenses. Amongst the provisions ostensibly non-binding one often finds a provision regarding the upcoming definitive agreement(s), which the parties undertake to negotiate in “good faith.” All boilerplate in the eyes of many practitioners.

I am a determined advocate for the proposition that there is no such thing as “boilerplate” if that means language which can be inserted robotically in an agreement, including a term sheet, because the wordsmiths need not waste their time in hyper-analyzing the meaning … just plug in the excerpts from a model form.

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Late Stage Deal Term Teardown

Take a moment to check out some of the trends surrounding Late Stage Valuations and Deal Terms. Included in the report is an analysis of over 200 companies and 270 deals.
VC Experts – Late Stage Deal Term Teardown is FREE, please don’t hesitate to pass it along.

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Early Stage Deal Term Teardown

Early Stage Deal Term Teardown

Billion Dollar Valuation Teardown

Billion Dollar Valuation Teardown

Trends in Financial Technology Investing

There is no denying that the Financial Technology sector is on the rise. As the companies start maturing and certain outliers build credibility with big raises the investors will continue to flock. ACE Portal’s Co-Founder and CFO, Carl Torrillo, interviewed Ross Barrett, Co-Founder of VC Experts, on the trends in financial technology (fintech) investing, valuations, and average investment size. Take a moment and see what trends are shaping this industry.

Incase you missed our Fintech Overview Report feel free to take at look at it here.

View the FinTech Report

View the FinTech Report

Friday Feature Company: Beepi, Inc.

Early Stage Tear Down

View the Early Stage Deal Term Report

After posting our Early Stage Deal Term Report we decided to dive deeper into one of the companies that caught our attention. Beepi is the first and only 100% online peer-to-peer marketplace to buy or sell a car. According to their website they “…take up to 9% of all transactions. To put that number in perspective: dealers mark cars up to 54%. [They] are able to offer low prices because [they] connect buyers and sellers directly and don’t have overhead like salespeople or physical lots…”. Beepi has raised north of $57M based on regulatory filings and we valued them at $166 M post-money after their Series B round.  You can see the investment profile below.

beepi_logo_transp_2Investment Data

View the Entire Company Report for Beepi, Inc.