Skip to main content

What does your VC have to do with your spouse?

Last week at Agile Entrepreneurs, an entrepreneur asked the inevitable question of valuation and equity you need to give up in return for VC funding. As the other entrepreneurs in the room chimed in with the expected answer, the analogy hit me.

Getting funding from a VC is like getting married. No matter who you marry, you give up 50%. And while every man dreams of marrying a hot bombshell, who he ends up with has a lot to do with who he is and how good he looks.

That pretty much sums up the terms you're likely to get from VCs:

The amount of equity you need to give up is fairly constant, irrespective of the amount of money you raise. And the amount of money you're able to raise depends on your leverage.


Moral: Focus on making yourself (and your company) more attractive, i.e. building value. There's not much else you control when in comes to negotiating with VCs.

Comments

Popular posts from this blog

Splitting User Stories vs. Rally's "split" feature (that has nothing to do with it!)

Agile tool Rally has a "split" feature it recommends to handle "unfinished work" in a Scrum Sprint: Manage Unfinished Work - Split user stories ( new link ) Below are my observations on the "Split" feature in Rally (followed by a few excellent articles on Splitting User Stories):   This "split" feature in Rally has numerous problems: 1. Nothing to do with Splitting User Stories It has nothing to do with "Splitting a User Story" which is an advanced but fairly well-understood field in Agile, and a tool for Product Managers to use in one of the two scenarios: The Product Manager does it before an Iteration commences (i.e. during backlog creation or release planning) to create User Stories by business value that are right-sized, i.e. they can be comfortably implemented inside an iteration; The Product Manager does it in Iteration Planning or in the middle of an Iteration to reduce scope by removing/simplifying accept

Agile Entrepreneurs Manifesto

The  Agile Manifesto  defines the 4 core Values that define "Agile":  " Individuals and interactions",  " Working software",  " Customer collaboration", and  " Responding to change" As I applied Agile requirements (user stories), engineering (XP), and process & project management (Scrum & Kanban) to my startups  (RideStation, and Agile Entrepreneurs)  starting from 2005 to now in 2018, I learned numerous lessons and shared them with my fellow entrepreneurs for the next dozen years. These lessons I have incorporated by "extending" the Agile Manifesto with two additional values pertaining to  Product (5th) and Startup/Business (6th)  -  that the services consultants who wrote it in 2001 probably didn't have to contend with as most (all?) of them were not founders of product startups:  "User Validation, Customer Traction, and Business Milestones" Agile Entrepreneurs Manifesto Us

Entrepreneur Committee - Advisory Board of SVASE

For whatever it is worth, I would like to announce to my millions of would-be readers that I have been invited to join the Entrepreneur Committee on the Board of Advisors to the Silicon Valley Association of Startup Entrepreneurs . And I have accepted. If you're a hi-tech entrepreneur, I would love to hear your suggestions on what I can do in my "official" capacity to make SVASE a better organization for startups.