My current objective is to create the entrepreneur's manual for raising venture capital.  The posts below are parts of this manual, organized in the chronological order of the fundraising process.

I generally post on Monday, Wednesday and Friday.
Suggest a topic by commenting on this post.

Disclaimer
Disclaimer

Presentation
A Brief Presentation: What You Need To Know About Raising Venture Capital
Video of Venture Capital Bootcamp
Venture Capital For A Fifth Grader

VC Overview
VC Fund Lifecycle:  Investing
VC Fund Lifecycle:  Growing
VC Fund Lifecycle:  Harvesting
Investors Tranche Fundraising To Reduce Risk
How Tranching An Investment Can Affect Investor Ownership
The 4 Types Of Exits: M&A
Earn-Outs:  Distributing Risk
The Control Premium
The 4 Types Of Exits: IPO 
IPOs Usually Take Longer To Realize Than M&A
Impact Of The Longer Time To Exit For Both M&A And IPO
The 4 Types Of Exits: Secondary
Investor Right Of First Refusal For Secondary
More Secondary Transactions Take Place In Weak Exit Environments
The 4 Types Of Exits:  Recapitalization 
The J-Curve:  The Evolving Value Of A VC Portfolio
The J-Curve Is Becoming A Hockey Stick (In The IT Sector)
The Venture Police: Reputation
Top Ten List:  How The Best VCs Interact With Entrepreneurs
Top Ten Ways The Best Entrepreneurs Interact With VCs
The Market For Venture Capital
The Market For Venture Capital:  Investable Capital
The Market For Venture Capital:  Investments
The Market For Venture Capital:  The Relationship Between The Two Markets
Who Invests In VC Funds?
VCs Are Setup To Be Bad Guys
What Resource Efficiency Means To VCs
The Longtail Of Venture: Why Some Companies Will Continue To Need VC And Other Won't

Developing A Fundraising Strategy
Overview Of Fundraising Stages
How To Finance Your Company:  Organic vs. Investment 
Want VC?  Then Be Ready To Go Big
Can Sliver Companies Become Big Businesses?
How Raising Angel Money Can Hurt Your Odds With VCs
The Other Reasons To Raise Money From VCs
Share Information Or Don't Bother Calling
The Benefits Of Sharing Your Idea
The Fundraising Process Is Flexible
The Ideal Times To Raise Capital In The Life Cycle Of A Fund 
How Much Capital You Should Raise:  Entrepreneur's Perspective 
How Much Capital You Should Raise:  VC's Perspective
More Capital Can Make You Less Efficient
Should You Tranche Your Fundraise?
What Is Dumb Money? 
Should You Take Dumb Money?
How Much To Say You Are Raising
High Valuations Can Put Entrepreneurs At Risk
Companies Typically Raise More Money In Subsequent Rounds 
Convertible Debt:  Delaying Valuation
Convertible Debt:  Mandatory Conversion
Convertible Debt:  Valuation
Take Seed From VCs To Get Them Hooked
Do You Need To Quit Your Day Job

Picking The VCs 
Not All VCs Are Created Equal
Why VC Websites Stink
The Advantages Of A Local VC
Consider Available Capital When Selecting VCs 
Types Of Risks VCs Take
How A VC Is Funded
Implications Of How A VC Is Funded:  Diverse LPs
Implications Of How A VC Is Funded:  Family Office 
Implications Of How A VC Is Funded:  Government
Implications Of How A VC Is Funded:  Public Markets 

Preparing Your Materials
What An Executive Summary Is
PPT Presentations Are Not Executive Summaries
Use Of Web Based Executive Summaries 
The Investment Overview Slide
The Importance Of Geography
VCs Appreciate Geo-Flexibility
What A Mission Statement Is
The Beneifts Of Mission Statements:  The Process
The Benefits Of Mission Statements:  Communication 
Value Proposition/ Pain Point:  Make The Case
Addressable Market:  Not Market Size
Addressable Market:  Making The Estimate
Two-Sided Addressable Markets
Disruptive Technologies Can Shrink Addressable Markets
Competitors May Have Different Addressable Markets 
Addressable Markets Are Based On Net Revenue
Competitive Landscape Overview
Barriers:  Get The Story Right
The Significance Of Patents
Major Achievements
Projections:  Nothing To Stress About
VCs Do Not Want Your Company To Be Profitable (In The Short Term)
VC Financial Performance Requirements
Overview Of Funding Status
Note The Milestones Before Your Next Round
Executive Summary Management Bios
The Significance Of Gray Hair
How Developed Does Your Management Team Need To Be?
Operating Timeline
Top 5 Ways To Make Fundraising Materials Operational

The Pre-Fundraising Process
Meet Early - Demonstrate A Trend
How To Guage Likely VC Interest In Your Company Early
What To Do If The VC Agrees To Give You Feedback
How To Interpret VC Response To Your Market Testing
How Testing The VC Market Can Lead To An Investment:  Being Monitored
How Testing The VC Market Can Lead To An Investment:  Beginning Due Diligence
How Testing The VC Market Can Lead To An Investment:  Going Straight To Term Sheet
The Best Time To Raise Money Is When You Can

Getting The Meeting
Why VCs May Call
Why An Executive Summary
Submitting Your Executive Summary
Get The VC's Attention:  Use The Right Subject
How Not To Submit An Executive Summary
First Contact:  Do Not Spam The Whole Partnership
Who You Should Submit Your Executive Summary To
How To Draw Attention To Your Executive Summary
Be Nice To Assistants
VCs Are Unavailable On Monday
Why A VC May Be Slow To Respond
Why VCs Don't Sign NDAs
Being Invited For A Call
How To Pitch VCs Remotely
Why You Might Not Get The Meeting
VCs Have Flashback Syndrome
Another Reason You May Be Rejected: Portfolio Concentration
The Unsaid Reason VCs May Not Back You:  Resource Efficiency 
Resource Efficiency Isn't Saclability (Necessarily)
What Resource Efficiency Means To VCs 
Avoid Unnecessary VC Bashing
Don't Try To Force Fit Your Model Into A VC's Thesis
Artificially Repositioning Vs.Evolving 
Has Your Startup Hit A Dead End?
Dead End?  Spin-Off A Derivative Business
Entrepreneurs Should Ask Why Not
Why VCs May Not Share Insights

The First Meeting
Who You Should Bring To Your First Meeting
Sit On One Side Of The Table
The Objective Of The First Meeting
Change Elevations:  The Structure Of A Presentation
How To Introduce Yourself
Make Your Intros Concise
Include Relevant Info In Your Intro
Competition:  Provide Insight
Management:  Competency
Enlisting Your Complements
Management:  Compatibility
Good Management Takes Less Time
Concerns About Successful Entrepreneurs
Build Rapport
Pitch Is Not The Right Word
What Is A Desirable Outcome?
Proving You Can Execute
Figuring Out The 'How'
Give Straight Talk
Expect Straight Talk
Present Flexibly
Solve The VC's Issues
Tell The Bigger Story
Do Not Stand While Presenting
Do Not Read From A Script
Do Not Ramble
Do Not Name Drop
Do Not Interrupt Your Partner
Do Not Focus On The Exit
Be Careful About Over-Selling Fundraising Interest
Follow-up Items
The End Of Meeting VC Pitch
Ask Questions At The End Of The Meeting
Ask The VC About Follow-On Investing
What To Do When The Meeting Ends

After The First Meeting
What To Expect After The First Meeting
Why VCs Don't Always Cut You Loose
What To Do When Your Company Is Being Monitored
How VCs Make Decisions Internally
How To Take Advantage Of The VC Decision Making Process
Creating Momentum
Maintaining Momentum:  Create Urgency
Don't Send Lots Of Emails After Being Rejected
Find A Champion
Make Younger VCs Your Champions
Respond Relatively Quickly To Requests   
Responding Quickly Can Help Maintain Momentum
VCs Are Not Like Your Parents
Reading VC Interest
Hear Feedback
Submit A Detailed Model
If You Can't Create Interest Move On
Getting Your Executive Summary Distributed To Other VCs
Why A VC Might Not Share Your Executive Summary With Other VCs
Sharing Your Executive Summary With Anonymous VCs

The Due Diligence Phase
The Due Diligence Process 
Why VCs Conduct Due Diligence
The Phases Of Due Diligence
Types Of Due Diligence Meetings
Exploratory Meetings:  Open Your Kimono
Why You Should Facilitate Due Diligence
Due Diligence Considerations
Customer Reference Calls
Filling Information Gaps: Experts 
Mitigating Partnership Risk: Hearing It From The Horse's Mouth
Sanity Check: Is Your Addressable Market Size Realistic?
Don't Underestimate Your Addressable Market
Why VCs Want To Review Your Model
Competitive Positioning:  Making The VC Comfortable
Management References:  The Ethics Test
Manage VC Expectations About Operating Performance
Evolve
Sharing Your Cap Table
Do The Founder's Personal Finances Matter?
Doing Due Diligence On The VC

Doing The Deal
Timing Of VC Investments
The Objectives Of The All Partners Meeting
The Objectives Of The All Partners Meeting:  Inform
The Objectives Of The All Partners Meeting:  Alleviate Concerns
The Objectives Of The All Partners Meeting:  Demonstrate Competency
The Objectives Of The All Partners Meeting:  Close The Deal
When VCs Issue Term Sheets
What It Means To Receive A Term Sheet
Signs You're Close To A Term Sheet
Term Sheets:  Exploding Offers
The No Shop Clause

Terms:  Rights To Future Cash
Venture Valuation Overview 
Pre-Money Does Not Equal The Last Round's Post-Money
Pre-Money Valuation Is Net Of Debt
The Arcane Method Of Valuing Early-Stage Companies
How VCs Determine Early-Stage Valuations:  Winning The Deal
How VCs Determine Early-Stage Valuations:  Target Ownership
How VCs Determine Early-Stage Valuations:  Ownership Of Key Parties
VCs Want Key Team Members To Have A Significant Stake
How A VC Can Change The Cap Table
Option Pools
Why Employees Receive Common Stock 
Preferred Stock
Preferred Stock:  Participation
Preferred Stock:  Liquidity Preference
How Liquidity Preference Impacts Investor Returns
Why Liquidity Preference Exists
Liquidity Preference Is Accretive
Liquidity Preference May Vary
Why Liquidity Preference May Vary
Market Dynamics Keep Liquidity Preference In Check
VCs Generally Retain Pro-Rata Rights
Pro-Rata Still Dilutes VCs

Terms:  Control
How Companies Are Governed
Why Is Governance Important?
Day-To-Day Decisions Are Made By Management 
Investors Typically Participate In All Three Decision Mechanisms
How VCs Control Companies
The Market For Control
How To Stay In Control Of Your Company
VCs Maintain A Voice By Setting Thresholds 
Who Cares About Majority Control Anyway?
Board Structure:  Seeking Balance
Independent Director:  The Tie Breaker
Securing An Independent:  Identify Candidates
Penalties For Not Selecting An Independent
Don't Let Your Board Get Too Crowded
Not Everyone Can Be On The Board - Observer Rights
Why VCs Invest In C-Corps
Founder's Equity Will Vest After VC Investment
Acceleration 
Acceleration Triggers

Comments

[Ardiansyah]

Hi Mark, I am a start-up entrepreneur from Indonesia. I am very interesting about your VC's manual. Because this issue is not popular yet in my country. So, I would like to ask for you somes questions:
1. Would you like to give me permission for translating this manual in Indonesian language? Because I think this will be useful for all start-up entrepreneur in my country.
2. Would you like to visit Indonesian to give some speech about how important VC is? We will be surprised if you dare to do it :)

Thanks.

[jamie hamilton]

Hi Mark,

I am wondering if you can get a bit more specific about modern Tech VC Valuation methods? I would be very interested in learning a step by step guide of your thought process, especially if it involves any industry standard formal/technical models that you still use.

Any direction would be greatly appreciated,
Jamie

[Mark Davis]

Jamie - that's on the list...stay tuned. If you have other topics you are interested in be sure to let me know.