Dermot Berkery is an internationally operating venture capitalist with Delta Partners.
This book is a toolbox that details how venture capitalists arrange the financing for a company.
. what they look for in a business plan
. how they value a business
. how they structure the terms of an agreement.
More in detail, the book leads you through:
. Developing a Financing Map
. Getting to the First Stepping Stone
. Understanding the Unique Cash Flow and Risk Dynamics of Early Stage Ventures
. Determining the Amount of Capital to Raise and What to Spend It on
. Learning How Venture Capital Firms Think
. Creating a Winning Business Plan
. Funding Early-Stage Companies
. Agreeing on a Term Sheet with a Venture Capitalist
. Setting Terms for Splitting the Rewards
. Allocating Control between Founders/Management and Investors
. Aligning the Interests of Founders/Management and Investors
For entrepreneurs seeking investors for a business, this is a great book. Every few pages new ideas could lead you to go back to your computer and rewrite you business plan.
The financials are thoroughly presented: what gross margin investors look for (80% or more) and why they need such extremely profitable products or services. Also, Berkery emphasizes the need for clear milestones.
Plus you learn the jargon or key phrases of venture capitalists, e.g., "a large but well signaled market," the importance of "market power" and an effective "route to customers."