How to get a job in venture capital (revisited)

by Seth Levine

A few years ago I wrote a post on how to get a job in venture capital.  It was lucky enough to get broad distribution and remains my most viewed and linked to post.  I've had a number of questions about it over the years and have tried to respond to people who wrote in to ask my opinion about their VC job search.  One of the most common questions I've received runs something like: "I get it - finding a venture job is hard.  I still really want to try and I have a 5+ year outlook on this.  What should I do during that time to work towards my goal of landing a venture job?"

Of course the real answer depends a lot on the individual asking - where they are in their career and life, where they live, what their educational and work background is, etc.  That said, let me try to provide a few ideas.

Go to business school.  As much as it pains me to say it the fact is that it's a lot easier to get a job in venture capital if you have a degree from a top business school (pains me not because I don't have many VC friends who attended such schools, but because I have many that have not, and I don't personally feel not having a degree from Harvard should be such a barrier to obtaining a venture job).  While there are a lot of reasons to go to all sorts of different business schools and while many very successful venture capitalists have either never been to b-school or didn't attend a top 10 school - if you're intent in attending school is to land a job in VC you are MUCH better off going to a top school.  MUCH.  I know of several firms that simply won't even consider associate candidates that haven't attended a very short list of top chools (Harvard, Stanford and a few others).  In fact, going to a non-top 10 business school could actually hurt your chances vs. not going at all. Not fair, I know (and I didn't attend b-school at all, so who am I to even suggest this) but true.

Work for a start-up.  This may seem obvious, but almost no matter what your background if you're trying to build a resume to land in VC, having start-up experience is extremely helpful (preferably from a start-up that ends up well).  As a practical matter, it's helpful to have this experience as a VC - it will give you insight on what works and what doesn't in the start-up world; will test whether you really like start-up environment and potentially expose you to venture finance and other areas of company formation and growth that will serve as a helpful backdrop to your venture career.  In addition, if your company has institutional investors, you will hopefully get the opportunity to spend some time with your would-be peers which may help jump-start your eventual search (make that happen - its one of the key reasons you took the job working for a start-up in the first place!).

Start a company of your own. If you can't find a start-up you're excited enough about to join, why not start one of your own?  Many successful venture capitalists have started their own companies.  Its a great way to gain operating experience, test out your technology ideas and, of course, meet venture capitalists.

If you're early in your career (and/or have the inclination), work for a bank or consulting firm.  Like going to a top business school, having banking or consulting on your resume is an indicator to potential venture employers that you're smart, aggressive, willing to work hard and well trained.  Having been a banker myself at the start of my career I'm not entirely sure these adjectives always apply, but there is clearly a bias in the world of finance towards these types of jobs as training grounds.  It will also bring you into contact with people who are likely to have networks that include venture capitalists as well as potentially up your chances of getting into a top school (see the first point above).  This is especially true if you're thinking of later stage venture or private equity who - much more so than early stage venture - tend to look kindly on the training one gets in these jobs.

Put yourself out there. Union Square Ventures famously asks potential applicants not to send in a traditional resume, but instead to point to the applicant's various activities around the web (their blog, articles they've authored, companies they are helping out with, etc).  While this may be an extreme example of a firm valuing the online presence of potential colleagues (and one that has worked very well for the firm), having a visible profile online that you can reference and point to will be helpful in many a VC job search (especially so if the firms you are seeking employment from invest in these areas, as USV does).  Your online activity can and should extend to reading and sometimes (thoughtfully) commenting on the blogs of the now vast list of VCs that write a blog.  These sorts of interactions are just one way to start to engage in a conversation with people in the industry you might one day work with.

Why VCs Want To Review Your Model

by Mark Davis

VCs can check a few different aspects of your business by reviewing your model.

First and foremost, they can assess your understanding of your business model (how you generate revenue). The logic in the math should demonstrate the drivers of value for the business. If the model reflects an understanding of these relationships, the VCs can often assume that is focusing on their right objectives.

Second, the model should illustrate the operating plan for the company. Headcounts and expenses should be clear. For example, after a quick look the VC should be able to find the number of sales people over time and office space expenses. As I mentioned in my post, Projections: Nothing To Stress About, one of the most important aspects of these models is that they can demonstrate your team's ability to think through the operational requirements of managing this business. It should answer some of the 'How' questions, such as 'how many sales people will it take to generate $1M of revenue?'

Third, the model should help VCs understand some of the quantitative relationships in the business. For example, they can evaluate the types of margins that the company generates and the viability of the marketing strategy (making sure that the cost of customer acquisition is aligned with the life-time value of each customer).

This is a very important part of the due diligence process. As a result, it is critical that the model is easy to navigate and sufficiently granular to demonstrate key relationships and assumptions.

Venture Capital and Mutation Theory

by Dan Malven

Many entrepreneurs that I talk to struggle with understanding how and why venture capitalists make the decisions they make, either in not funding their business or funding a different business.  It helps to understand the top-down dynamics that go on in the VC world, as illustrated by the following anecdote.  I heard this second-hand, so if anyone with first-hand knowledge (I know I have some readers from Adams Street) wants to chime in, I'm all ears.

Adams Street Partners is the oldest and arguably the best fund-of-funds in the private equity sector.  They invest in private equity partnerships in total, of which venture capital is a subset, but they are best known as a venture capital fund-of-funds firm.  They invest over $1 billion per year in new private equity partnerships, and have been doing it for over 20 years.  They have generated an annualized 20% return on capital (IRR) back to their investors over that 20-year period.  They invest in a lot of VC firms, who in turn invest in a lot of underlying portfolio companies.  Multiple thousands of underlying portfolio companies.  Over that period of time and that amount of capital, one would think the 20% return was generated by a very diverse mix of successful underlying portfolio company exits.  Not so fast.  The story told by Bon French (CEO of Adams Street) is that a full 5-points of the 20-points of return over that 20-year period is attributable to a single company exit within a single VC firm portfolio (Benchmark Capital's investment in eBay).

Why is this story important for entrepreneurs seeking to raise VC money?  Because VCs know they have to fund the monster hits in order to generate the type of return necessary for the VC asset class to continue to be attractive to the limited partner investors.  They need to find and fund the "mutant" companies: those with the DNA that creates the potential for them to grow beyond any rational expectation.  Hence, venture capitalists have to believe in "mutation theory" as the reason that the asset class is attractive to limited partner investors, like Adams Street.

I have no data to support this claim, so you've been forewarned about its potential accuracy, but my belief is that if one were to remove the top performing 1% of portfolio company exits out of the VC asset class return calculations, VC would under-perform the S&P 500.  It's that top 1% of exits that drive the whole reason for existence of venture capital as an institutional-grade investment asset class.

Entrepreneurs need to understand this so they can understand how and why VC's make the decisions they do.

The Ideal Times To Raise Capital In The Life Cycle Of A Fund

The Closed Session of a Board Meetig

by Brad Feld

At the end of every board meeting I'm a part of we have a closed session.  This is a session that includes only the board members.  All of the boards I'm on include the CEO as a board member so the CEO is part of the closed session.  If there are multiple founder / management board members, they attend.  But - no observers and no members of management that aren't on the board.

I was on a board call yesterday that was confusing.  The company is doing well, the management team is very solid and stable, and the board packages are comprehensive and transparent.  I've worked with the CEO for a long time and we rarely have any misunderstandings (we have plenty of disagreements, but we know how to talk through them.)  The company is mature enough that we've shifted into an eight per year board meeting tempo; two meetings a quarter - one in person that is usually deeper and strategic; one by phone that is an update call.

When I got back from vacation on Wednesday, I read the board package.  No surprises.  There are no strategic activities going on for the company (no fundraising, no M&A, nothing "fancy") - just strong and steady execution.  The tempo of the call started off a little odd - the CEO brought up some forward looking concerns of his.  While he was describing them, I was having a hard time connecting what he was saying to the board package I had just read.  As we went through the management team review of the business, I got even more confused as many of the tactical things we had discussed at the previous meeting had been done well and everyone sounded upbeat, although appropriately cautious.  The CEO highlighted a few more concerns of his and then asked an open ended question - something like "what do you guys think?"

We were all on the phone so it was hard to read any nuance.  I expressed my confusion.  I asked a few clarifying questions.  My confusion increased.  Maybe it was jetlag, but my brain was just not connecting the dots.  At some point the CEO took us in a different direction to try to address another issue that he was potentially concerned about.  While the issue he raised had some short term issues, he had extrapolated it as a long term trend.  I didn't agree that it made sense to extrapolate the trend from one data point, made some suggestions, but felt the awkwardness increasing.

We ended the meeting and went into closed session.  We all took a deep breath.  I told the CEO I was confused.  He was confused.  The other board members on the phone were confused.  If we had a giant time machine we would have gone back 60 minutes and started over.  Instead, we had a great ten minute conversation where we realized that we were just talking past each other.  We hit the giant mental reset button and in a few more minutes had recalibrated.

Even though we usually end after the closed session, this time we decided to bring the management team back in to clarify things.  We realized that when we ended the meeting, we had a leadership team that was likely as confused by the meeting as we were.  I imagine there was sixty seconds of discomfort while everyone gathered where they were wondering what was going to happen next.  We had a short reset of the discussion, clarification of what the CEO was really trying to communicate, and reaffirmation that we were on the right track, even though this was a weird and confusing meeting.

I talked to the CEO today just to check in.  We had a good call and we both reaffirmed that all was cool.  He said he'd learned something important - that if he was just going to "think out loud" during a board meeting that he should preface this with a statement indicating this.  I agreed that this was the right conclusion - that I'd much rather he "think out loud" vs. feel compelled to figure it out all.  I also suggested to him that if he thought I was lost in space, he should just hit me over the head with a brick.

I'm really glad we had the institution of the closed session firmly in place for this board.  It gave us room to figure out what was going on, where the miscommunication was, and reset the discussion.  Without it I expect everyone would have scattered to go back to work with their confusion firmly intact.

How to manage your company's board of directors

by JB Pritzker

1. Meet by phone whenever possible. Most of them will be doing their email or goosing their admin or something and not paying any attention at all. They'll just vote when you ask'em to.

2. Never distribute anything in advance; they might read it and get themselves all confused. Just present it all: gets you through most of the meeting.

3. Never number the pages of what you are presenting. Lots of time can be used constructively figuring out what page everybody is on. If you email the material (preferably just after the start of the meeting), send lots of separate files. Turkeys'll never know what to look at. Bonus suggestion: send slightly different copies of files with different pagination to everyone; it's a lotta work but it's worth it.

4. Have your CFO present numbers, lots of numbers. Make sure they get a chance to go over variances in the pencil budget.

5. If you have to meet in person – it is gonna happen sometime – use food. Any discussion you don't want input on should be right after lunch. No one's gonna be awake then.

6. Speaking of lunch, you can play this for lots of time. Have your dumbest admin take orders off some huge takeout menu. Get what type of bread they want, dressing, meat, lettuce, all that. Then have a smart admin shuffle the list so NO order is right. Wrong bread with wrong filling etc. No veggies for vegetarians (they tend to be nitpickers anyway). Kills lots of time and helps make sure they meet on the phone next time. BTW, they'll pay no attention to anything between when lunch is ordered and when it comes so minimum of an hour.

7. Do bring up board comp and director's liability insurance. Sure to get their attention and won't interfere with the real business of the company.

8. Have a nine person board with three insiders, four VCs and two people who don't have a clue. Just four VCs alone should guarantee gridlock.

9. Every meeting should run way over schedule. You control the agenda: presentations up front; substance in the third overtime period.

10. If they've gotta discuss something, get'em down in the weeds. Color of the office; words for the new ad campaign; what bank to deposit tax payments in. That keeps everybody out of trouble.

11. If you're public and their questions are going where you don't want to go, tell them you'd be glad to answer but that'll make them insiders for the next two years. You can also tell by who squirms who was planning to sell.

Private Investors and Equity Finance

By Helen Cox

Private investors provide equity finance for business opportunity. They invest money into new and up-and-coming businesses; they have no preference in the industry sector that they invest in as they have a wide range of interests.

Private investors bring money to a business that is needed to move the business forward. As well as bringing in the required funding to get a business off the ground, a private investor will also provide your business with the skills and contacts that are needed to help your business progress.

2008 has, so far, not been extremely rewarding for private investors, which is why it is so important that you explore investments which are well positioned for a longer term favourable theme rather than those dependent on a highly unpredictable economic cycle.

With private investors some investors will invest passively, which means that after providing a company with the finance needed they will play a limited role within the company. In cases such as these the investors are usually professionals in medicine, law, real estate etc. Other investors however will want to be increasingly involved and will use their network and experience to drive your business. They will also want some type of control with business decisions.

When it comes to getting the help of an investor it is important to know that private investors have more confidence investing with people that they know so the fewer degrees of separation equals a greater chance of a deal being done. Before any deal is made it is important that you decide on the amount of capital needed as investors won’t be interested in guess work; they will want specific numbers.

The most common type of private investors are angel investors, otherwise known as business angels. These angel investors hold extremely high risk and require a very high return on investment. Due to the fact that a large percentage of angel investments are lost completely when early stage companies fail, private investors seek investments that have the potential to return at least 10 or more times their original investment within 5 years, through a defined exit strategy, such as plans for an initial public offering or an acquisition.

There are many different ways to describe private investors; they have many names attached to them such as venture capitalists and business angels. These private investors are often retired entrepreneurs or executives. They can provide your business with valuable management advice and important contacts. Private investors are wealthy individuals who invest in high growth business.

Private investors are growing to be one of the most popular ways of gaining business finance. This is making equity finance overtake debt funding as the best way of funding your business. Private investors are really worth looking into if you are hoping to start your own business. You do however have to ensure that you have your business plan wrote to the highest standard if you want to attract the help of private investor as they will use your business plan to see if your business has a high chance of being successful.

Helen is the web master of ARCH Entrepreneurs, specialists in all aspects of Private Investors.

Please feel free to republish this article provided a working hyperlink remains to our site

Article Source: http://EzineArticles.com/?expert=Helen_Cox
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Business Plan Series: Financials

by: Steven Fisher

As we come toward the close of our business plan series we reach probably the most important section of the plan next to the Executive Summary, the Financials section.

Despite the work you put into creating a stellar business plan most investors will read your executive summary first and then dive right into your financials. Their reasoning is to see how well you have thought out your business model, when you will reach profitability and with a proper exit will it provide the return on investment they are looking for.

So what are the core elements of the financials section?
The financial plan section of the business plan consists of three financial statements, the income statement, the cash flow projection and the balance sheet and a brief explanation/analysis of these three statements.

The way I have done most of these in the past is to build my financial model to detail the relevant expenses and revenue streams to automatically create these statements but also allow me to model the business and change things based on various assumptions.

When it comes to expenses think of your business expenses as broken into two categories; your start up expenses and your operating expenses. Startup expenses are all the costs of getting your business up and running go into the start up expenses category. Operating expenses are the costs of keeping your business running. Think of these as the things you're going to have to pay each month. Your list of operating expenses may include salaries (yours and staff salaries), rent or mortage payments, telecommunications, utilities, promotion, loan payments and office supplies.

That is just a partial list of things to get you started. Your operating expenses are the costs of what it will take to keep your business running each month. This is also called your "burn rate". If you take your startup costs and six months of operating costs that is the general rule in how much money you will need to get your business going long enough to get revenue coming in to get you cash flow positive.

Beyond the core financial statements
Many startups can take longer because they have development and staff costs that are high and have such an extensive burn rate that they need outside investment. This is why your projections and return on investment are so important for others to understand what they are getting themselves into. About.com sums it up nicely with what you will need:

• A short-term projection of the first year, broken down by month
• A three-year projection, broken down by year
• A five-year projection. Don't include this one in the business plan, since the further into the future you project, the harder it is to predict; however, have it available in case an investor asks for it.

Scenarios
Another thing you must consider in your financials is the case of scenarios. Scenarios are projections that show what the business would look like if certain things happened. Things like no customers for a while vs. a quick rush of new customers, rapid development costs vs. slower development costs.

You really only want to show two scenarios

Funding Requirements
For many of you going out and getting external funding will not only be required at some point it will be mandatory in order to meet the goals you have set out to achieve. From your financial model you should write in your summary and be able to show on your projections the following:

• Funds required to start the business
• Anticipated funding over the next two, three, and even five years
• Use of funding
• A timeline for funding

Good link love
Here are some excellent links on financials:
Michael's Big Idea
SCORE Templates
About.com - Financial Projections

Venture Capital Valuation

by Dan Rua

I received a couple more VC FAQ questions. This time from an entrepreneur and investment banker who saw Angie's List close a $35M round with Battery Ventures. That large funding, and others in the social media space, left her wondering how value is measured and created in online businesses.

Her site, roxiticusdh.blogspot.com, appears to be an early step towards a "Best of" site for various cities around New Jersey and elsewhere. I say "early step" with no details, because the name and domain are clearly ripe for improvement. Her questions were:
How do VC's value an online venture?

The "valuation question" is probably the most often asked question I hear directly from entrepreneurs or on venture capital panels. Entrepreneurs are either trying to understand how crazy high valuations in the news are justified or how crazy low valuations (in their eyes) offered by early-stage VCs are justified. I've been on the entrepreneur side of the table and now the VC side and I know the answer, but it's rarely satisfying for entrepreneurs to hear.

First, there is no one way to value a company. Different funds use different methods, and when you're talking about M&A time it's highly dependent upon the synergies a specific acquirer is trying to buy. Approaches also differ based upon the stage of a company. Because I focus on seed and early-stage companies, any suggestion by entrepreneurs of discounted cash flows makes me run the other way -- the future is way too uncertain for such calculations.

So, if there isn't one way, what can I expect on the fundraising trail? A mix of Art, Science and Voodoo. The Art of valuation takes into account your Market, Management, Magic and plenty of other soft factors to create a spectrum of investor excitement. The Science of valuation takes into account private and public comparables (what price are similar companies commanding in the marketplace), and some spreadsheet work with future revenue/income potentials. The Voodoo of valuation brings in such factors as fund size, typical/expected ownership % and the termsheet competition. At the end of the day, it comes down to getting multiple funding offers so you can actually reach a "market price" -- zero or one offer does not a market make.

I've even created a short presentation that reviews the Art, Science and Voodoo of Valuation.

Applying all of this to an online venture doesn't change the process much. One oddity in online ventures is the value placed on eyeballs (by some), with the potential of a freemium revenue model (most users are free, pro users pay). Because of these oddities, I'd put more weight on the Voodoo elements -- divide your round size by the typical ownership expectation of the fund you're speaking to, and you'll get pretty close to the valuation they will offer (if they offer anything).

Do you have any advice on short, medium, and long-term strategies to maximize the value of a blog or online business?

For a blog, I'd start with the First Commandment of blogging: frequent quality content = traffic. Frequent content isn't enough alone and quality content isn't enough alone. It may be heresy, but I'd suggest frequency is even more important than quality -- assuming some periodic quality a reader can expect. Readers aren't expecting every blogger to be a professional writer, but they are looking for unique access or unique perspectives on information.

I'd also say that pro blogging is a contact sport. It's hard to do it well if you don't live the blogosphere life of social networking, bookmarking and engaging your readers. Just reporting information isn't enough.

Then, assuming traffic comes, the question becomes how do you make a business from your efforts. There are thousands of get-rich-blogging pundits, but I'd focus on the networks or marketplaces that help you earn by doing what you already love. If your blogging has to change significantly for monetization then I'm not sure it's sustainable. Write the way you enjoy and find marketplaces that will bring advertisers to you, from a variety of topic/product areas so you and your readers don't tire of the sponsors.

Last, for blogs, I'd suggest setting your expectations appropriately. Getting rich blogging is unlikely. However, there are thousands of bloggers paying a mortgage, buying new cars or taking extra vacations with their earnings. Consider anything beyond that just icing on the cake.

For non-blog online businesses, it's hard for me to give one set of value-creating actions. It really depends upon the business. As an investor who has been around viral businesses since HotMail first pioneered the approach, I encourage every online business to 1) find ways for new customers to learn about your business specifically because current customers use it and 2) streamline your referral/signup process to remove every barrier to adoption.

So there you have it, valuation and value-creation in one handy-dandy blog post. I really only scratched the surface, but I hope you find a nugget of interest.

Good old days of venture

by Mike Feinstein

I've been going through my track record as we put our diligence materials together for our new fund.

One stark fact is how the venture business has changed.  My last two operating jobs were at Shiva and New Oak Communications.  Shiva raised a bit more than $8M in four rounds of financing from 1989 through 1994.  That small amount of money came from two blue-chip investors -- Greylock and Kleiner Perkins.  In those days, you dripped the money into the companies (the biggest round was $4M).  Shiva went public in late 1994 with a $200M+ market cap and had a $2.4B market cap at it's peak in June 1996. 

New Oak raised just under $12M in two rounds (including seed capital) in 1996 and 1997.  When we sold the company in January 1998 for $156M, we still had $6M in the bank.  So, in about 15 months we spent almost as much capital as Shiva spent in 5 years.  Things were already accelerating, but no one complained about the outcome.

In looking at the venture deals I have been involved with since 1999 (14 deals), they have averaged $52M+ per deal!  Unfortunately, not all of these companies had a successful outcome, and some of them may require additional capital.  So, significantly more capital has gone into deals since 1999.  Now, that is not a big surprise, but it is still stark to see the contrast.

Of course, the problem is that with $12M of capital per deal, a $75-100M outcome is a very significant win.  With $50M of capital per deal, you need a $300-400M outcome to achieve the same multiple.  I think that there were proportionally many more $75-100M exits in the early to mid 90s than there are $300-400M exits today.  So, it's much tougher for VCs to make the same type of returns now than it was before.  And, that's a good reason why my new firm will be doing something different!

PS - Inflation is a small factor here.  According to my quick check, there has been about 31% inflation in the past 10 years.  So, it does make a difference on capital per deal, but not that big of a difference.

Valley VCs Get The Blues

by Ken Schachter

Valley VCs have the blues.

Sentiment fell to its lowest point ever for the first quarter, according to a Silicon Valley Venture Capitalist Confidence Index report released Thursday. The index fell from 3.54 to 3.22 on a 5 point scale, meaning venture capitalists are more pessimistic than at any time since the survey was introduced more than four years.

The University of San Francisco study, which polled 32 venture capitalists in the San Francisco Bay Area, was released as fresh reports showed the initial public offering market remained in a funk in the first quarter.

Market researcher Dealogic reported that 36 IPOs that were registered with the Securities and Exchange Commission have been withdrawn, a more than 200 percent increase from the 15 deals pulled in the same period of 2007. The aborted 2008 IPOs were expected to raise $6.3 billion versus $2 billion for the deals scuttled in 2007. Post-IPO prices also remain under water. The Renaissance IPO Index, a rolling two-year listing of IPOs starting from the first day of trading on U.S. markets, was down 20.2 percent in the first quarter. Though prices have recovered in April, as of the close Wednesday, the index was still down 15.2 percent from the start of the year.

IPOs are an important exit avenue for VCs who can repay their limited partners, who provide funding, and raise fresh cash to fund additional start-ups.

In the first quarter, the best-performing sector in the Renaissance Capital index was utilities, with a 4 percent gain, and the worst was technology, with a loss of 25.4 percent.

Professor Mark Cannice, who oversaw the USF sentiment survey, said that VCs cited the credit squeeze and volatility in financial markets as factors in blocking exits of venture-backed companies.

Professor Cannice also produced a separate report with Ling Ding that measures VC sentiment in China. The China Venture Capitalist Confidence Index paralleled the Silicon Valley survey, hitting 3.53, its lowest point in the 3-year history of the study. Like its U.S. counterpart, the Chinese sentiment index is based on a 5-point scale.

注：最新的统计，国内08年1季度VC投资又创新高，好像VC的信心很足呀。

4 Things to Do After You Get Your First Term Sheet

by Bill Burnham

I've recently been involved in helping a couple companies with their first major round of VC financing.  It's actually been pretty interesting for me because I have histroically been on the other side of the table.  In addition to generating several stories worthy of "The Funded" and getting a better appreciation of the trials and tribulations that entrepreneurs must go through when trying to raise money, I also gained a better appreciation for just how important it is to properly manage the "end game" of a VC financing.

What is the "end game"?  The End Game generally takes place after you have gotten a term sheet, but before you actually sign it.  How well you manage this process can make a big difference in the actual terms and pricing you ultimately get, so it pays to approach this process as thoughtfully and diligently as you do any other part of fundraising.

With that in mind I present 4 things that you should definitely do after getting your 1^st term sheet:

1. Get a second term sheet:  It may sound flip, but this is the single most important thing you should do upon getting your 1^st term sheet.  Nothing loosens up a VC’s purse strings or makes them more flexible on a particular term than the threat of competition.  Without competition (real or perceived) you have very little leverage against a VC.   Now getting one term sheet, let alone two, is tough enough, but getting two must be your goal and you must not waiver in pursuit of that goal even you after you get the 1^st one.  The biggest problem most entrepreneurs have executing on this strategy is that they have mismanaged the sequencing of their fundraising.  Many entrepreneurs make the mistake of pursuing an "in order" fundraising process whereby they take one meeting, run that process to its logical conclusion and if that doesn't work out try to get a meeting with another VC.  VC fundraising must be pursued concurrently!  You must put as many irons in the fire in as short a time as possible so that all the firms start the process at roughly the same time. As firms progress through the process, you should do your best to try and "herd" them along by trying to slow down the ones pushing ahead and speed up the ones lagging behind.  The ultimate goal is to ensure that when you receive your first term sheet you have several other firms that are very close (within a week or so) to potentially issuing their own term sheets.  Proper sequencing ensures that you are not forced to take an inferior "bird in hand".
2. Ignore term sheet "expiration dates":  Most VCs put "expiration dates" in their term sheets (usually at the end).  In almost all cases these are artifices that are inserted into the term sheet in order to put pressure on the entrepreneur and to try and prevent them from "shopping the sheet".  The reality is that as long as you are negotiating in good faith with a VC they are not going to pull a term sheet.  That's not to say that VCs won't pull a term sheet if they feel like you are being dishonest with them or have no real interest in taking their money, they will, but as long as you deal with them professionally and explain to them why you need more time to consider their offer, they will extend their phantom "deadline".
3. Do some due diligence of your own:  One of the more unfair aspects of VC fundraising process is that VCs are allowed to take months probing every orifice of your company, but entrepreneurs are expected to make one of the most important decisions of their life in a week or two and often with little or no information.  There's no good reason for this and all entrepreneurs would be well served by taking some time to do some basic due diligence on any investor who has offered them a term sheet.  I suggest, at a minimum, talking to at least two entrepreneurs that the VC has funded and then talking through with the VC A) all the deals they have done and what happened to them B) the current status of their fund and partnership.  Doing your own due diligence has 4 main benefits 1) it may help you avoid making a bad decision  2) it will create the perception of a competitive process 3)  it will make you appear more savvy and diligent to the VC  4) it can come in handy when you are trying to stall while you get your second term sheet.  Don't go overboard and act like a VC by asking lots of annoying questions and drilling to the center of the earth on irrelevant/tangential questions; just ask for a few reasonable pieces of information and be very gracious about it.
4. Negotiate:  By the end of the fundraising process most entrepreneurs are so fatigued and shell shocked that when they finally get a term sheet they are loath to do anything that might upset the apple cart.  This situation generally leads to some pretty one sided "negotiating" sessions in which the entrepreneur meekly asks to eliminate the triple participating preferred, the VC says "NO!", and the entrepreneur quickly retreats.   The reality is that VCs expect some negotiating and their first offer is never their best.  That means you should, within reason, feel free to push back on their initial offer.  Of course, if you have a second or even a third term sheet you can push back even harder, but even if you only have one term sheet you should still push back.  As they say, it never hurts to shake the tree.

If you follow these four pieces of advice you will put yourself in position to get the best possible outcome.  The most important thing to remember is that once you get a term sheet, the whole dynamic of the fundraising process changes and the ball is now in your court.  How you "return serve" can make a big difference in the outcome as I've seen VCs increase their initial offers anywhere from 25–50% when these principals are applied.  Your mileage may very, but its definitely worth a shot.

by 桂曙光

(《创业邦》www.cyzone.cn 杂志 2008年4月)

保护性条款（Protective Provisions），顾名思义，就是投资人为了保护自己的利益而设置的条款，这个条款要求公司在执行某些潜在可能损害投资人利益的事件之前，要获得投资人的批准。实际上就是给予投资人一个对公司某些特定事件的否决权。

投资人为什么要保护性条款

也许你会认为投资人通过派代表进入董事会，对公司就有足够的控制，保证公司不会从事任何违背其利益的事情，投资人没有必要太关注保护性条款。

这种看法是不对的，因为作为董事会成员，投资人代表的法律职责是为公司的利益最大化而工作。有时候，公司的利益与某特定类别股份（比如A类优先股）的利益是不一致的，这样就会出现这样一种情况：作为董事，他在法律上应该为了公司的整体利益同意某件事，而作为某类股份的股东，需要通过其他渠道来保护自己的利益。

A轮融资后投资人持有的优先股通常占公司股份比例为20%-40%，如果普通股股东联合起来，他们可以控制公司的股东会和董事会：

· 优先股无法影响股东投票，因为他们的股份不够；

· 优先股也无法影响董事会投票，因为他们的席位不够。（比如，董事会组成是2个普通股席位、1个优先股席位、无独立董事席位）。

投资人需要通过保护性条款，至少要防止普通股股东（比如创始人）做以下事情：

· 将公司以$1美元价格卖给创始人的亲属，将优先股扫地出门；

· 创始人以$1亿美元价格将部分股份卖给公司，立刻过上优哉游哉的好日子；

· 发行巨量股份给创始人，将优先股比例稀释成接近零。

典型优先股保护性条款

Term Sheet中典型的优先股保护性条款如下：（中/英文条款对照）

Protective Provisions: So long as any of the Preferred is outstanding, consent of the holders of at least 50% of the Preferred will be required for any action that:

(i) amends, alters, or repeals any provision of the Certificate of Incorporation or Bylaws in a manner adverse to the Series A Preferred;

(ii) changes the authorized number of shares of Common or Preferred Stock;

(iii) authorizes or creates any new series of shares having rights, preferences or privileges senior to or on a parity with the Series A Preferred;

(iv) approves any merger, sale of assets or other corporate reorganization or acquisition;

(v) purchases or redeems any common stock of the Company (other than pursuant to stock restriction agreements approved by the board upon termination of a consultant, director or employee);

(vi) declares or pays any dividend on any shares of Common or Preferred Stock;

(vii) approves the liquidation or dissolution of the Company;

保护性条款：只要有任何优先股仍发行在外流通，以下事件需要至少持有50%优先股的股东同意：

(i) 修订、改变、或废除公司注册证明或公司章程中的任何条款对A类优先股产生不利影响；

(ii) 变更法定普通股或优先股股本；

(iii) 设立或批准设立任何拥有高于或等同于A类优先股的权利、优先权或特许权的其他股份；

(iv) 批准任何合并、资产出售或其他公司重组或收购；

(v) 回购或赎回公司任何普通股（不包括董事会批准的根据股份限制协议，在顾问、董事或员工终止服务时的回购）

(vi) 宣布或支付给普通股或优先股股利；

(vii) 批准公司清算或解散；

这些保护性条款的数量有多有少，少则3、4条，多则二十多条。我认为以上条款是公平及标准的，而其他没有列出的条款是对投资人有利的，而通常不是风险投资的典型条款。

谈判要点及谈判空间

跟Term Sheet所有其他条款一样，保护性条款的谈判结果，也是根据企业及投资人双方的谈判地位决定，谁强势，谁就获得有利的条款。

保护性条款通常是Term Sheet谈判的焦点，创业者当然希望保护性条款越少越好，最好没有；而VC刚好相反，希望对公司的一系列事件拥有否决权级别的控制。有没有这个权利是个问题，而行不行使是另外一个问题。

1. 保护性条款的数量

如上文罗列，投资人在保护性条款中会要求对公司的一系列事件拥有批准的权利。创业者跟投资人谈判的最直接目标就是减少这些事件的数量，而不是试图取消保护性条款。

因为公司的重大事项都会通过董事会来决策，董事会保障公司的利益。投资人的保护性条款其实是防止发生有利公司但可能危害投资人利益的事件，这类事件包括几类：

· 可能改变优先股权利和地位的（如上文i、iii）；

· 可能改变优先股股权比例的（如上文ii、v）；

· 可能改变优先股退出回报的（如上文iv、vi、vii）。

这些事件都是与投资人的利益直接、紧密相关的，其他事件都是可以通过谈判，排除在保护性条款之外。通常而言，上文的7个条款是比较标准和容易接受的。

另外，如果投资人强势，要求对更多事件拥有批准权利，创业者也有其他处理办法，比如：

（a）要求公司运营达到阶段性里程碑之后，去除某些保护性条款；

（b）把投资人要求的某些保护性条款变成“董事会级别”，批准权由投资人的董事会代表在董事会决议时行使，而不由投资人的优先股投票。

2. 条款生效的最低股份要求

公司应该要求在外流通（outstanding）的优先股要达到一个最低数量或比例，保护性条款才能生效。是“只要有任何数量的优先股在外流通”就生效，还是“超过X%的A类优先股在外流通”才生效。

很多保护性条款中要么明确，要么隐含地要求只要有“任何数量”的优先股在外流通，保护性条款都有效。这是有问题的，比如，如果因为回购或转换成普通股，优先股只有1股在外流通，这1股优先股的持有人不应该拥有阻止公司进行某些特定事项的权利。

通常而言，这个生效比例越高对创业者越有利。我看到比较多的是25%－75%，50%好像没有什么争议，双方应该都是可以接受的。

3. 投票比例下限

保护性条款实施时，“同意”票的比例通常设为“多数”或“超过50%”，即公司要从事保护性条款约定的事项之前，要获得持有多数或超过50%优先股的股东同意。在很多情况下，这个比例被设置的更高，比如2/3，尤其是公司有多个投资人的时候（A轮联合投资，或公司经过多轮融资），要保证多数投资人支持公司从事的某个行为。

通常而言，这个投票比例的门槛越低对创业者越有利。如果太高，创业者就要当心股份比例小的投资人（small investors）不适当地行使否决权。比如，条款要求90%优先股同意，而不是多数（50.1%）同意，那么一个只持有10.1%优先股的投资人就可以实际控制保护性条款了，他否决就相当于全体优先股股东否决了。

4. 不同类别的保护条款

当进行后续融资时，比如B轮，通常会讨论保护性条款如何实施。有2种情况：（a）B类优先股获得自己的保护性条款；或（b）B类优先股与A类优先股拥有同一份保护性条款，并一同投票。

创业者（公司）当然不希望不同类别的投资人各自拥有单独的保护性条款，而希望所有投资人采用同一份保护性条款，所有投资人一起投票（情况b）。因为A、B类优先股的保护性条款分开的话，公司做任何保护条款种的事情，需要面对2个潜在的否决表决。如果是A轮投资人继续投资B轮，那就没有什么好说的，自然是选择（b）。

防止投资人谋求自己利益

保护性条款是防止普通股大股东损害优先股小股东，但是它不是牺牲公司利益为优先股谋求利益的工具，创始人要防止优先股股东运用保护性条款谋求自己的利益。

比如，公司收到一个收购意向，创业者及管理团队认为卖掉公司对股东有利，董事会同意并批准了。但如果投资人的其他投资案例都不太好，指望这个公司通过IPO或后续可能更好的并购价格让他赚得盆满钵满，投资人就不愿意现在出售。于是，投资人在董事会投票赞成出售，通过行使保护性条款否决出售。

其实企业宁愿要一个“自私”的投资人，他通过其董事会席位为自己某利益，而不希望投资人通过保护性条款做除了保护自己之外的任何事。至少，这个“自私”的投资人作为董事会成员的能力与其董事会席位数量成比例，而保护性条款，给予他一个跟他的股份比例及董事会席位安排完全无关的一个“一票否决权”。

总结

投资人以小股东的方式投资，要求保护性条款是合理的，也是非常正常的，设立保护性条款目的是保护投资人小股东，防止其利益受到大股东侵害。但投资人对保护性条款的行使，会对公司的正常运营产生一定的干扰，创业者在这个条款的谈判是要考虑如何在这两者之间找到一个适当的平衡。（桂曙光）

（参考资料：NVCA, Feld Thought, Venture Hacks, A VC, Ask the VC）

VCs Love To Be The First Firm To Be Second

by Mark Davis

In my post, Timing Of VC Investments, I discussed the incentives a VC faces with regard to the timing of formally offering a term sheet.

I had a professor who summarized the net result of these incentives by saying "VCs love to be the first firm to be second to put down a term sheet". In his opinion, nobody wanted to put a term sheet down first in order to both maximize their diligence time and avoid being the only firm chasing after a deal. He felt that many firms look to the interest of other VCs as an additional form of validation.

The takeaway from this for entrepreneurs is that getting your first term sheet can lead to several more. However, VCs are aware of this pattern too. As a result, they often make their term sheet expire rather quickly to prevent other VCs from trying to catch up and steal the deal. Term sheets can be set to expire in as little as 24 hours or as much as two weeks.

How much money should we raise?

by Venture Hacks

How much money should you raise? As much as possible—with some caveats. But hey! don't take our word for it.

Two investors' opinions.

Eugene Kleiner, Founder of Kleiner Perkins:

"When the money is available, take it."

William Janeway, Managing Director of Warburg Pincus:

"Failure to execute operationally is not the only source of risk; every venture is also subject to volatility in the price and availability of capital due to the volatility of the stock market. After the collapse of the Internet Bubble, many promising companies foundered because their funding dried up.

"By contrast, our biggest successes at Warburg Pincus (VERITAS, BEA) have come from inverting the normal venture funding model, with the visionary investor as company co-founder… And we have supported the multi-year process of building a sustainable business by underwriting all of the capital needed to reach positive cash flow, thereby not only enabling management to focus full-time on the business but also insuring against the risks generated by a volatile stock market…

"In the post-Bubble world, long-term financial commitments are required to fund the ventures that will fulfill the long-term technological vision and implement the long-term commercial promise of the Internet Age."

Two founders' opinions.

Mike Ramsay, Founder and CEO of Tivo:

"One of the reasons that TiVO is thriving today is that we were well-capitalized. We were able to power our way through the downturn—that early 2000 period when [our competitor] Replay went away. We were capitalized enough that we knew we could ride through it. While we had to make a few adjustments at the company, there was never a question that we were going to survive. We knew we were going to survive."

Marc Andreessen, inventor of the bendy-straw:

"So how much money should I raise?

"In general, as much as you can.

"Without giving away control of your company, and without being insane.

"Entrepreneurs who try to play it too aggressive and hold back on raising money when they can because they think they can raise it later occasionally do very well, but are gambling their whole company on that strategy in addition to all the normal startup risks.

"Suppose you raise a lot of money and you do really well. You’ll be really happy and make a lot of money, even if you don’t make quite as much money as if you had rolled the dice and raised less money up front.

"Suppose you don't raise a lot of money when you can and it backfires. You lose your company, and you’ll be really, really sad.

“Is it really worth that risk?

“…Taking these factors into account, though, in a normal scenario, raising more money rather than less usually makes sense, since you are buying yourself insurance against both internal and external potential bad events — and that is more important than worrying too much about dilution or liquidation preference."

Make sure you read Marc's full article for his caveats: How much funding is too little? Too much?

Guidelines to consider no matter how much you raise.

No matter how much money you raise,

1. Maintain control at any cost.
2. Monitor your total liquidation preference and avoid liquidation preferences above 1x non-participating. You will have to sell the company for at least the liquidation preference before the common stockholders see a penny.
3. Raise enough money to run more than one experiment. Some companies need 12 months of runway to do two or more experiments, others might need 24 months. Seed stage companies that can't raise enough money to run more than one experiment should keep their burn down to extend their runway.
4. Act like you don't have money.

Guidelines to consider if you do raise a lot of money.

If you do raise a lot money,

1. Understand that your investors will have very high expectations. You have will have to "go big or go home".
2. You will have to make a lot of progress with this round if the company ever wants to raise money again.

Alternatively, if you would rather keep your liquidation preference low and maintain your exit options, at least raise enough money to run two experiments.

Raise too little money and you may go out of business when you run into trouble. Raise too much money and you may make less (or zero) dough when you exit. Take your pick: disaster vs. dilution.

High Valuations Can Put Entrepreneurs At Risk

by Mark Davis

People always want to get the best deal they can. For entrepreneurs this typically means getting the highest valuation when raising money. The higher the valuation, the less of the company that the entrepreneur will sell to VCs when taking an investment.

Like all things in life, however, moderation is key. Entrepreneurs that succeed in obtaining extraordinarily high valuations can risk their own financial rewards; there are three problems that excessively high valuations can create.

First, inflated valuations can limit the company's access to short-term resources. By maximizing the valuation, an entrepreneur may lose access to the credibility and resources offered by the most sophisticated VCs for the current round.

Second, as the valuation increases it is likely that fewer investors will be willing to invest in the future. If the valuation continues to increase after each round, entrepreneurs may find that there are no other investors willing to get involved, leaving them with the challenge of trying to milk their existing investors, reduce costs or consider reducing their valuation.

Reducing the valuation of the company in the future can be painful for the entrepreneur as they may lose a significant portion of their equity. This happens because many investors use anti-dilution provisions to protect themselves. These legal terms allow investors to partially protect their equity stakes in the event of future investment rounds being completed at reduced valuations (also known as 'down rounds'). Ultimately, in a down-round the ownership of the current equity holders declines. These anti-dilution provisions leave the entrepreneurs to bear the brunt of this dilution. This protects the investor from the consequences of entrepreneurs that don't perform well or over-value their company early on. Since these terms are commonplace, entrepreneurs have an incentive to value their company appropriately to ensure that future valuations continue to increase.

In sum, it rarely pays to be greedy. While some succeed in over-valuing their companies, cutting aggressive deals can come back to haunt them as sophisticated investors know how to protect themselves from overstated valuations. In the end, it seems that it's always better to do deals that value your company reasonably.

Tranched Financings

by Brad Feld

Q: What type of structure have you seen where the VC agrees to fund over some time period 18-24 months and up to some level.

A: (Brad): These are commonly called "Tranched Financings."  The typical approach is that a VC commits to fund a specific amount in multiple "tranches" based on the company achieving some milestones.  For example, assume a $10m financing broken up into two tranches - an initial $5m investment on day 1 and another $5m investment after 12 months assuming the company "releases a product with performance characteristics acceptable to the investor."

There are numerous derivatives of this case.  The valuation on each tranche (or price per share) can be held constant or can vary (typically increase) for the second tranche.  The trigger (what causes the second tranche to get funded) can either be under the VC control (similar to a put option) or the company control (similar to a call option).  The amounts for each tranche can vary (they don't have to be the same) and there may be even more tranches (I've seen situations where there are monthly tranches over a twelve month period.)  Finally, the characteristics of the trigger vary widely.

An alternative approach is to have a warrant attached to the financing round that is exercisable at the discretion of the investor within some time period.  This serves a similar purpose to a tranched financing, but gives the investor more control and potential option value in the case where the company is acquired early before the warrant expires.

Tranched financings tend to come into play more frequently in downside cases where a company and its investors are trying to extend the company's life either to an exit event or another financing.  In these cases, the investors want to run a single process within their firms for getting approval for an investment, but then want to maintain control over how much money they invest at any given time in case the deal goes completely south (leaving the flexibility to decide to pull the plug in the hands of the investor.)

Occasionally tranches are used in the early stages of investments although more recently I seen the "warrant approach" instead of a tranched approach.

Be a VC for the Day

by Steve Brotman

Earlier this week I got a cold call from an entrepreneur; I had mistakenly picked up the phone, figuring it was my 4:30 call with a CEO in our portfolio.  He immediately launched into his pitch, and I lamely suggested that he send me a username and password for his demo, and I'd get back to him, as I really didn't want to be late on this call.  Portfolio companies take priority for VCs over potential portfolio companies, at least me.

Any ways, the entrepreneur starts bashing VCs, suggesting that they don't believe in or care about entrepreneurs really, and only in the money they make.  I interrupted him, and said, thanks, but I really needed to be on another call.  The entrepreneur, perhaps realizing this wasn't a good tactic, continued to say there were other VCs that do care about entrepreneurs and I was one of them.  That's nice that he felt that way, but I think it's a common misperception about VCs not caring about entrepreneurs.   I told him I still had to go, but please do send the information.  This entrepreneur probably thinks I am an asshole despite what he told me, as I haven't heard from him since.

While some of that rap among VCs is earned, I think it's generally not the case.   VCs live and die by the entrepreneurs they back.   Critical is the ability to "call the baby ugly" without destroying that entrepreneur's confidence.   Think about it: if entrepreneurs think VCs are assholes and have no redeeming traits that dramatically enhance the businesses VCs back, then they won't be VCs for very long, as good entrepreneurs would just avoid them like the plague, and backing great entrepreneurs is what makes a VC "successful", more than anything else I think.   

VCs deeply care about entrepeneurs.    A lot of us write blogs that are pretty explicit about that caring(as I recently did about Bear and the PSD spirit) spend oodles of time helping their portfolio companies, and investigating ways to give our portfolio companies an edge.  We live the highs and lows that our portfolio companies go through.  We are often interrupting our families lives as necessary just like entrepeneurs do, and generally will do whatever we can to help our portfolio succeed.   If we didn't care, we'd leave the industry and do something else that values tact over performance, as dealing with entreprenerials (strong willed or otherwise) is not exactly the easiest thing to do.   Does it come as a surprise that VCs are not exactly the easiest to deal with either? 

So cut VCs some slack.  We are doing the best we can, given startup dynamics.   Give VCs a chance.  And you just might find you get what you need. 

One more thing I am going to throw out there:  I'd love to swap places with an entrepreneur for the day if I could, like the Prince and the Pauper, see what happens.  The VC, me, being the Pauper, of course.  Write me an email, explaining why you'd like to be a VC for the Day and how you could do my job better, and what I could do at your company to help you. 

My only condition is the entrepreneur blog about it as well or include their experience on my blog and you will have to agree that I can publish that as a comment below. Any submission you make to me via email (anonymous of course, unless you are comfortable otherwise), I will have the right to publish on this blog.  I will pick the best email pitch to do it.  Weight will be give to entrepreneurs that fit my criteria for investing, as that will make it more interesting for both of us. 

We'd do it sometime in May, so get your emails to me by the end of April.  The entrepreneur would come in to be a VC one day and join our investment team, and I'd go over as a an interim part of the company's management team another day, so unlike the Prince and the Pauper, this would be a bit more supervised.  Like in the Prince and the Pauper, no lasting or permanent decisions can be made and we should set some ground rules, but I think that'd be cool.   Like the book, I think that it will be hard to shed our prior roles and absorb the new one, but it'd be interesting, nonetheless. We'll see!    

How to prevent your investors from selling!

by Alexander Muse

One day everything is going along great with your business and your investors decide they want to sell.  You don't want to give up your personal secretary, the company car or the free Cokes.  Your investors keep talking about getting a better return on their money or some such nonsense, but you are happy with the status quo.  Then one day, POOF! Your investors get a letter from another company who wants to buy the company.  You would do anything to prevent them from selling.  You and your friends still control the board so you have a little time to try to stop the deal from going through.  How do you prevent your investors from selling?

If you are Yahoo! you do your best to screw up your business as fast as possible.  Make yourself so freaking unappealing no one could possibly swallow the poison pills you have taken.  Yahoo began screwing up their business in February by entering into agreements will all current employees that provides 24 months of severance pay if they are terminated.  Once Yahoo's HR department finished operation foobar, the revenue generating side of the business (ad sales) decided to turn over advertising to the companies #1 competitor, Google!  Next Yahoo decided to find an albatross to hang around their neck, preferably a company that has already destroyed another company.  According to the WSJ, Yahoo is close to completing a deal to acquire AOL from Time Warner.  Time Warner could never swallow AOL and it almost destroyed the company, so it is a perfect fit for a suicidal Yahoo.

Of course, some of Yahoo's investors are freaking out.  Legg Mason almost coughed up a lung when Microsoft suggested they would lower their bid.  Realizing that Yahoo is on track to ruin their business, investors couldn't imagine NOT selling to Microsoft.  They would be stuck with an asset that is worth considerably less than it was just a few months ago.  Ironically, Yahoo's only hope is to be acquired by Microsoft…

VC在估值谈判中的奥秘

——估值·回报·期权·对赌

作者：桂曙光

(本文已在《经理人》杂志的“公司金融”专栏发表，转载请注明出处及作者)

你了解VC进行企业估值时的理念和手法吗？你知道VC估值时所设计的“重重机关”吗？

创业企业家，很清楚企业每年可以创造多少收入、多少利润。但是，他们知道自己的企业在资本市场上的价格吗？

对企业的估值，是创业企业引进风险投资（VC）时绕不开的关口。VC一方面要对企业的业务、团队、规模、发展趋势、财务状况等因素感兴趣；另一方面，也关注企业的估值——这和我们在市场买东西的道理一样：满意产品质量和功能，还要对价格能接受。

价值评估，是资本市场参与者对一个企业在特定阶段价值的判断。对非上市企业，尤其是创业企业的估值谈判，极富挑战性。其过程和方法，隐藏着一些不为常人所知的奥秘。

企业家对估值认识的误区——企业价值≠权益加总

一些传统企业家，往往错误地认为：VC一定会要求自己企业要有多少固定资产、多少净资产，以此权衡企业是否有投资价值。按照他们的一般思维，将会计报表上的各项权益加总，就得到了企业的“总价值”，最多，再在净资产的基础之上溢价。然而，对于很多初创企业，或者对于没有太多净资产的成熟企业的企业家来说，融资的时候常会困惑：估值多少？才会让VC接受，而自己又不“吃亏”呢？

另外，有些早期企业可能已经投入了很多资金，但业务还没有开展起来。于是，创业者便认为：我的企业价值，至少要比我已经投入的资金多吧？！

然而，资本市场上的VC却不是这种思维。VC并非单纯购买企业的资产，更不是承担企业已经发生的成本。他们看重的，是企业未来的盈利能力（潜在盈利能力），以及企业成长空间。所以，VC眼中，企业的价值绝不是简单的“权益的加总”，或投入的“沉没成本”。因此，VC通常用“P/E倍数”（见下文）的方式对企业估值，或用现金流贴现方式对企业估值，而非简单的“权益加总”。

【案例】

A游艇休闲俱乐部创立了1年左右，老板已经投资2亿人民币，并进行了一些前期规划、关系梳理、海域租赁等方面的工作。但是，因为企业目前尚未发展会员，也就没有任何业务收入。俱乐部的财务人员了解一些常用的估值方法，但认为都不太适合用在他们企业身上。更重要的是，公司前期已经投入了2亿资金，估值如果少于这个金额，老板绝对不会答应。笔者给的建议是：先按常规的估值方法做出一个估值，去跟投资人谈，但是以已经投入的资金额（2亿）作为底线。

其实，企业在和VC进行估值谈判时，完全可以撇去各种看似纷繁复杂的财务估值方法，先认真地自问：企业是不是一定需要VC的资金？没有这笔资金企业就无法长大或者活下去了吗？另外还需要换位思考：VC不投资你的企业，是不是活不下去？他的资金是不是没有其他地方可以投资了？

企业如果和VC达成3、5年的长期合作，那么，即使在估值上有所让步，这点所谓的损失是微乎其微的。因为VC的资金及其他增值的服务，能帮企业把蛋糕做大。对长期合作而言，投资协议上的关于企业经营管理方面的条款，可能对企业家更为重要，这些条款对企业未来价值的影响更为重大。企业家为使VC在其他条款上宽松友好，而在估值上做些让步，这是值得的。

VC估值的一个最基本前提——回报要求

“企业估值”看似深奥和神秘，但实际上，有时这些估值方法出奇地简单。

VC通常用反推的方式，以“投资回报倍数”估值。比如，VC对早期投资项目的回报要求是10倍，对扩张期和后期投资项目的回报要求是3-5倍。10倍是不是看起来有点暴利？下面的标准的风险投资组合可以做出解释（以10个投资项目为例）：

• 4个失败
• 2个打平或略有盈亏
• 3个2-5倍回报
• 1个8-10倍回报

尽管VC希望其所投资的企业都能成为下一个微软、下一个google……但是，现实就是这么残酷，只有百分之一甚或万分之一的机会，才能投资到这样赚几百上千倍的企业。现实中， VC通常要求在成功投资的企业赚10倍或者更多，来弥补其他失败的投资。

假设：VC投资一个早期企业，4年后，该企业以1亿美元上市或被并购（这是目前类似企业上市或并购的平均估值），并且假设期间没有后续融资。运用“10倍回报”的原则逆推，VC对企业的投资后估值就是1000万美元。如企业融资额是200万美元，并预留了100万美元的期权（给职业经理人团队），VC对企业的投资前估值即为700万美元。

VC对初创企业估值的经验范围，大约是100万美元–2000万美元，通常的估值区间则是300万美元–1000万美元。通常，初创企业第一轮融资金额是50万美元–1000万美元，出让的股权比例约20~40%。

企业最终的估值，除受“预期回报倍数”影响外，也会受到VC间竞争的影响。如果目标企业被很多投资人追捧，那么，有些投资人可能会愿意降低自己的投资回报率期望，以高一点的价格拿下这个投资机会。

【案例】

笔者曾为B医药技术公司操作第一轮VC融资（约500万美元）。该公司在找笔者寻求融资顾问服务之时，正在跟国内知名风险投资公司L Capital谈投资事宜。但尚未进入实质性谈判阶段，VC经过6个月的调研、沟通后，仍未表达明确的投资意向。笔者接受B公司委托后，在1个月之内，将其推荐给国内最知名的几家风险投资公司（美元投资基金），这些都表示了极大的兴趣，其中S基金在跟B公司创始人见面的第二天就出具了投资意向书，他们甚至愿意投资1000万美元，P/E估值倍数为10倍。另外，G基金报价也是1000万左右，但给企业的P/E估值倍数为14倍！这个倍数是在国内VC投资领域比较罕见的高倍数。

当然，这些消息没有逃过L Capital的眼睛。他们很快就找B公司创始人，立刻出具了一份非常优惠、友好的投资意向书。虽然价格比S基金和G基金都低，但其他条款上非常宽松，而且企业家也认为L Capital的合伙人比较容易沟通，也不“贪婪”，最为重要的是，L Capital的国内资源可以对B公司业务上有更多帮助。

最终，B公司——这个被VC追捧的香饽饽，经过综合权衡，最终选择了L Capital这个相对满意的合作伙伴。

VC在估值时常埋的一个陷阱——期权设置

如果一家企业接受100万美元VC投资后，估值为500万美元，那么投资人的股份就是20%，企业投资前的估值理论上应该是400万美元。

但通常的情况是，投资人会要求企业拿出10%左右的股份作为期权（又称“期权池”，用于以后分配给管理团队），期权的价值就是50万美元。VC常要求在投资之前，由原始股东拿出期权，那么投资前的企业实际估值，就由400万美元变成了350万美元：

              350万实际估值 + 50万期权 +100万现金投资 = 500万投资后估值

相应地，创业企业家的剩余股份只有70%（350万/500万）了。

VC之所以要求把期权放在投资前估值中，原因有三：

首先，期权仅仅稀释原始股东（企业家）的股份。如果“期权池”是在投资后估值中，就会等比例稀释创始人（普通股）和VC投资人（优先股股东）。比如，如果10%的期权在投资后估值中提供，那么投资人的股份就变成了18%，企业家的股份则变成了72%：

              20%(或80%)×90%= 18%(或72%)

可见，投资人在这里占了企业家2%的股权的“便宜”。

其次，“期权池”占投资前估值的份额比想象的要大。在本例中，期权占投资后估值的10%，但是却占投资前估值的12.5%：

              50万期权/400万投资前估值 = 12.5%

第三，如果企业家在下一轮融资之前出售企业，没有发行的和没有授予的期权将会被取消，这就是“反向稀释”。创始人股东在一开始就“买了单”，但所有股东都等比例受益。比如：10%期权中有一半（5%）没有授予，这些期权将会被按股份比例，分配给当时所有股东。所以，VC应该可以拿到1%（20%比例），原始股东拿到4%（80%比例）。企业的股权结构变成：

              100% = 原始股东74%＋VC投资人21%＋管理团队5%

换句话说，企业家的部分投资前价值，进入了VC的口袋。

风险投资行业都是要求期权在投资前安排。企业家唯一能做的，就是尽量根据企业未来人才引进和激励规划，确定一个小一些的“期权池”（ 比如5%），把这些期权预留给在下一轮融资之前的管理团队。如果有后续融资，VC投资人和创始人一起再设置一个“期权池”，大家共同买单。

估值分歧的解决——对赌条款

VC给企业估值常用“P/E倍数”法（市盈率法）。

              投资后企业估值 (P) = P/E倍数×投资后一个年度的预测利润 (E)

在目前国内企业首轮融资时，投资后市盈率大致8-10倍左右。对不同行业的企业和不同发展阶段的企业，P/E倍数倍数不太一样，成长性差一些的传统企业，可能只有3-5倍。

如果，预测投资后第一年企业的利润是100万美元，采用10倍P/E，投资后估值就是1000万美元。如果VC投入200万美元，所占的股份就是20%（但是，此方法对短期内无法盈利的企业不适用）。

VC跟企业家在“P/E倍数”上达成一致后，最大的谈判点，就在于预测利润额了。对于预测利润额，VC和企业家常会有分歧——VC认为企业家达不到其预测的利润；而几乎所有企业家都会说“这个预测甚至是保守的！”

这时，在投资协议里就会出现“对赌条款”，按实际实现的利润，对企业价值和股份比例进行重新计算和调整：

              投资后企业估值 (P) = P/E倍数×投资后一个年度的实际利润 (E)

在上例中，如果投资后一年，企业只实现了50万美元利润，那么投资后估值就只有500万美元。相应的，VC应该分得的股份应为40%，企业家需要拿出20%股份来补偿VC。

              200万/500万=40%

当然，这种对赌情况是比较“彻底”的，有些投资人也会相对“友善”，给一个“保底”的估值。上例中，VC可能要求按照公式调整估值，但是承诺估值不低于800万，此时企业的估值便不是500万美元，而是800万美元了。投资人应该获得的股份就是25%：

              200万/800万=25%

对赌协议，除了可以用“预测利润”作为对赌条件外，也可采用其他条件，比如收入、用户数、资源量等，进行对赌。

但有些企业家会感到迷惑：达不到预测利润，会降低企业估值；那如果利润超过预测，是不是可以提高企业估值呢？答案自然是否定的。VC当然希望你做的越大越好，但是如果估值也可以往上调整，VC还赚什么？为什么要投资这家企业呢？

【案例】

C电子商务公司融资时，H Capital出具的投资的第一份意向书中的估值条款如下：

如果公司2007年达到300万美元净利润，投资人给企业的投资后估值是2400万。如果公司达不到上述净利润，投资后估值如下调整：

投资后估值＝2007年净利润×8

C公司创始人认为，此对赌条款会严重影响公司的长期发展战略。因为他可以操纵2007年的利润，比如，把2008年利润前移、减少市场推广力度等；另外，万一做不到预计的300万净利润，根据投资人的投资额，会导致公司出让超过50%的股份，所以创始人不答应VC的这个估值方式。于是，VC又出具了一份投资意向书，将估值方式做了重大变更：

如果公司2007年达到270万美元净利润，2008年达到500万净利润，投资人对企业的投资后估值是2700万。如果公司达不到上述净利润，投资后估值将进行如下调整：

投资后估值为以下低者：（a）2007年净利润×10；（b）2008年净利润×5.4；

但是，估值调整后，投资人的股份比例不超过49%。

此方法考虑了公司近期目标和长期的发展，另外，也给创始人一个保底的股份比例（>51%）。第一年10倍的P/E和第二年5.4倍的P/E也是个非常不错的倍数。

总结及结论

企业估值，是VC和企业家协商的结果。仁者见仁，智者见智，没有所谓真正的公允值，重要的是，企业家要理解投资人估值的合理性。

另外，企业估值也会受到众多因素的影响，尤其是对于初创企业。所以，估值也要考虑VC的增值服务能力和投资协议中的其他重要条款——这些对企业的长期影响，要比估值条款大得多；

时间不等人，市场不等人。VC和企业家，不应因为估值分歧而错过投资和被投资机会。投资方及融资方都应该尽快找到适合自己的合作伙伴。（文/桂曙光）

文中相关专业术语的英文翻译：

风险投资：Venture Capital

价值评估：Valuation

投资前估值：pre-money valuation

投资后估值：post-money valuation

期权池：Option Pool

对赌条款：Ratchet Terms