Monday, January 14, 2013

VC Overview with Peter Wendell of Sierra Ventures

imageOur crash course in Silicon Valley began with a thousand foot overview by Peter Wendell of Sierra Ventures.  In addition to the basics of VC, there were a few core points that stood out among all the talks in this subject area I’ve heard:

  • Expect 4.5 rounds of financing on average before liquidity.  Shoot to raise 6-12 months of cash (just enough for a inflection point in value)
  • Founder groups are usually 1-4 people.  Seek a diverse team that can cover the critical areas of the business (product dev/sales), but maintain agility.
  • Founders are the decision makes.  They steer the business.  Employees execute.
  • Most founder shares are subject to reverse vesting.  This enables the founders to ‘own’ shares before they are vested.  This allows founders to maintain control and to enjoy favorable taxation (capital gains % vs. regular income %).
  • Spend some time on
  • As a founder you want to help VCs’ greed supersede their fear.  After this inflection point the checkbook comes out.


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