Book Review: "Venture Deals"

"Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist" by Brad Feld and Jason Mendelson is a fantastic book on getting venture funding for a startup or company. As I listened to the book on Audible for $15 (7.3hrs / 240 pages), I took detailed notes as to how the tips apply to my own business and pitch. It's a highly detailed book describing many of the special terms, skills, and documents you needed to successfully secure venture funding for startup groups. This book imparts many important soft lessons as well, such as how to negotiate, reading personality types, and picking which VCs you want to personally work with. This book is for inventors, hackers, entrepreneurs, founders, CEOs, VCs, lawyers or anyone seeking venture capitol in a project. I give 8 / 10 stars as this book really equips you for exact showdown of negotiating venture deals and has great re-read value because it can be so dense. I've decided to include it in my book reviews as I think it fits excellently as an educational text that can help hackers get the most out of a venture funding challenge and because it fits perfect in series with my other inventor / founder / startup book-reviews, The Phoneix Project and The Lean Startup. The following is the chapter listing to help you get a better idea of the contents of the book:

Introduction: The Art of the Term Sheet

Chapter 1: The Players

The Entrepreneur
The Venture Capitalist
The Angel Investor
The Syndicate
The Lawyer
The Mentor

Chapter 2: How to Raise Money

Do or Do Not; There Is No Try
Determine How Much You Are Raising
Fund-Raising Materials
Due Diligence Materials
Finding the Right VC
Finding a Lead VC
How VCs Decide to Invest
Closing the Deal

Chapter 3: Overview of the Term Sheet

The Key Concepts: Economics and Control

Chapter 4: Economic Terms of the Term Sheet

Price
Liquidation Preference
Pay-to-Play
Vesting
Employee Pool
Anti-dilution 

Chapter 5: Control Terms of the Term Sheet

Board of Directors
Protective Provisions
Drag-Along Agreement
Conversion

Chapter 6: Other Terms of the Term Sheet

Dividends
Redemption Rights
Conditions Precedent to Financing
Information Rights
Registration Rights
Right of First Refusal
Voting Rights
Restriction on Sales
Proprietary Information and Inventions Agreement
Co-Sale Agreement
Founders’ Activities
Initial Public Offering Shares Purchase
No-Shop Agreement
Indemnification
Assignment

Chapter 7: The Capitalization Table

Chapter 8: Convertible Debt

Arguments For and Against Convertible Debt
The Discount
Valuation Caps
Interest Rate
Conversion Mechanics
Conversion in a Sale of the Company
Warrants
Other Terms
Early Stage versus Late Stage Dynamics
Can Convertible Debt Be Dangerous?

Chapter 9: How Venture Capital Funds Work

Overview of a Typical Structure
How Firms Raise Money
How Venture Capitalists Make Money
How Time Impacts Fund Activity
Reserves
Cash Flow
Cross-Fund Investing
Departing Partners
Fiduciary Duties
Implications for the Entrepreneur

Chapter 10: Negotiation Tactics

What Really Matters?
Preparing for the Negotiation
A Brief Introduction to Game Theory
Negotiating in the Game of Financings
Negotiating Styles and Approaches 
Collaborative Negotiation versus Walk-Away Threats
Building Leverage and Getting to Yes
Things Not to Do
Great Lawyers versus Bad Lawyers versus No Lawyers
Can You Make a Bad Deal Better?

Chapter 11: Raising Money the Right Way

Don’t Ask for a Nondisclosure Agreement
Don’t Email Carpet Bomb VCs
No Often Means No
Don’t Ask for a Referral If You Get a No
Don’t Be a Solo Founder
Don’t Overemphasize Patents

Chapter 12: Issues at Different Financing Stages

Seed Deals
Early Stage
Mid and Late Stages
Other Approaches to Early Stage Deals

Chapter 13: Letters of Intent—The Other Term Sheet

Structure of a Deal
Asset Deal versus Stock Deal 
Form of Consideration
Assumption of Stock Options
Representations, Warranties, and Indemnification
Escrow 
Confidentiality/Nondisclosure Agreement
Employee Matters
Conditions to Close
The No-Shop Clause
Fees, Fees, and More Fees
Registration Rights
Shareholder Representatives

Chapter 14: Legal Things Every Entrepreneur Should Know

Intellectual Property
Employment Issues
State of Incorporation
Accredited Investors
Filing an 83(b) Election
Section 409A Valuations

Authors’ Note
Appendix A: Sample Term Sheet
Appendix B: Sample Letter of Intent
Appendix C: Additional Resources
Glossary
About the Authors
Index
Excerpt from Startup Communities

The book also has a companion site, with tons of resources for your startup! I'de absolutely pick this book up and review it if your seeking funding for your startup or considering pitching your startup at a 'SharkTank' like event. The book really arms the reader to go to toe with an a angel investor, who will likely have the upper hand in such a situation. Further, the book helps founders determine when is the proper time to engage a lawyer, and where to best spend your resources with the lawyer. One of my favorite parts is how he includes game theory in his analysis of striking deals. Whatever you decide, this is a pretty educational book and a great glimpse into the world of venture capitol funding from the perspective of a founder, lawyer, and investor, all wrapped up into one (although not your lawyer or actual legal advice lol).