By: Ali Rahimtula and Matt Eckert
I am delighted to collaborate with Matt Eckert, partner at the law firm Foley Hoag, on this post. I have worked with him on many investments over the years and if you are looking for an excellent corporate lawyer to help you on your next deal, you can’t do much better than Matt.
A common question we get asked by entrepreneurs we work with is what are the key deal documents that are created in a venture funding round and what – from a commercial perspective – is important for a founder or CEO to pay attention to. Continue reading
By: Ali Rahimtula, Anthony Tjan, Dick Harrington
Few topics are of higher interest and concern amongst startup management teams than compensation. Surprisingly, however, there has been relatively little written on this subject.
In early stage startups and venture-backed companies, this issue has special significance because cash is scarce. Mistakes early on can doom a startup. As a company evolves, equity becomes more valuable and the design of a compensation scheme needs to become more scientific and thoughtfully planned. Continue reading
By Christopher W. Brody, Ali Rahimtula
From time to time, we have been asked what characteristics successful Internet, or Internet enabled, companies have in common. In surveying existing successful companies, we came up with the list below. Please bear in mind that no company necessarily had all of these characteristics, but all successful companies had at least some of them. Continue reading
This article examines the characteristics that make a data business valuable. It will be useful for entrepreneurs refining the strategy of an early stage data business, and those seeking to best position their data business for a successful funding round. Continue reading
One of the greatest pleasures of my job is meeting many early stage entrepreneurs every week. I estimate that about 70% of the companies I meet have SaaS or subscription-based revenue models. Because of this, and because a core area of our investment mandate is to invest in enterprise SaaS businesses, I wrote this piece, which was initially an internal guide to explain how to systematically analyze a company’s SaaS metrics.
What follows is a set of analytical methods that a VC may use during diligence or the general decision-making process.
This piece is intended for SaaS entrepreneurs raising a financing round. Understand how investors use SaaS metrics and how best to present them and you will increase the likelihood of getting venture funded. Continue reading
Much has been made of the potential of bitcoin, the currency, but the venture capital community is increasingly focusing on the commercial potential of the underlying blockchain technology. Perhaps more interestingly, executives at large and sophisticated incumbent financial institutions and financial technology companies that I have spoken to, by and large, do not dismiss the technology. They believe it has legs and are studying the technology with a goal to enhance their product offerings. In short, many incumbents have a blockchain strategy. The general spirit is that the blockchain is like the Internet; sure, some businesses were disrupted and rendered obsolete, but the Internet made most financial services and other industry products better.
While many questions remain, the blockchain’s core features – decentralization, speed, low take rates, and stability (i.e. hard to hack) – allow it the potential to reinvent many industries. Beyond banking and payments processing, there are fascinating commercial applications to capital markets, insurance, legal technology, advertising, and government, among others. In each industry, there is the potential for significant efficiency gains (i.e. current functionality delivered faster and more cheaply) but also disruption. What follows in this piece is a synthesis, in simple language, of some of the most exciting commercial applications of blockchain technology we may see across these major industries in the future. Continue reading
This week I had the privilege of being invited to speak at Harvard Law School in David Hornik’s term sheet negotiation class. David’s course is called Entrepreneurship and Company Creation and is one of the most popular elective courses at the school. Continue reading