By Michael Lazerow, contributor
The venture capital ecosystem is a hall of secrets. The rise of the venture capital blogger, notably Union Square Venture's Fred Wilson, entrepreneur-turned-VC Mark Suster and Foundry Group's Brad Feld, is a welcome first step in providing budding entrepreneurs a view into the venture world. But they are the exception to the rule. For the most part, VCs prefer to keep their entrepreneurs in the dark about how the process really works for one simple reason: it benefits them greatly.
My company, Buddy Media, raised $28 million last month. I've now closed about 10 rounds of financing for three different companies. With the most recent process still fresh in my mind, I have decided to use the experience to provide transparency into the major leagues of VC fundraising. Pulling back the curtain on the fundraising process will help entrepreneurs create more investment-worthy companies that can become large enterprises. That's good for founders. It's also good for the nation's economy, contributing to rapid job creation and continued innovation.
What follows is an anatomy of a fundraiser. I've come up with eight lessons, all of which should help entrepreneurs -- and some of which should benefit VCs, too. If you just want the top lines, they are:
But I'd recommend reading on for this entrepreneur's guide to the VC galaxy.
The way startups raise money is changing, fast. Angels, super angels and VCs have to figure out the new rules, but that's good -- really good -- for founders themselves.
By JS Cournoyer, contributor
I have been reading about the changing landscape of how technology companies get their initial outside funding after friends and family have chipped in. Seed or early stage investing, as it is referred to by entrepreneurs, angels, VCs MORENov 8, 2010 4:29 PM ET
|Five things you didn't know about Bernie Madoff's epic scam|
|Obamacare: 365,000 have signed up for insurance on exchanges|
|Teen millionaire helping Yahoo become cool again|
|What the budget deal doesn't do|
|1.3 million set to lose jobless benefits|