Jamie Goldstein

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Partner at Pillar

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VC 1.01

VC1.01 covers the following topics: The Business of VC – How Venture Firms Work; Stock and VC Investment Structures; and Key Considerations for Founders & Employees.

Advice for Founders During Uncertain Times

During economic downturns, every company faces a different situation, and what’s right for yours could depend on stage, funding history, cash balance, and space. What to do falls into three buckets: fundraising, operational focus, and reducing burn rate.

Term Sheet Grader

We developed the term-sheet grader, a simple way to compare different term sheets or help characterize whether a term sheet is good or evil.

Part 5: The Final Pieces

In this final part, we close out the remaining terms you are likely to see -Voting Controls, Mandatory conversions, and dividends.

Part 4: Board of Directors

There are many venture backed startups that have a VC representative from every round — seed, A, B, C, D, etc. It is often said that the performance of a company is inversely proportional to the number of VCs on the Board. A better Board would be one that has a mix of VC representatives and industry experts. But how to get there?

Part 3: Anti-Dilution

The standard VC term sheet has the concept of anti-dilution, meaning if the next round is priced lower than the previous round, the VC will  be entitled to more shares (retroactively) to make up for this unfortunate circumstance. We don’t like the sound of that at all.

Part 2: Preference / Preferred Stock

A Preference or Preferred Stock is where an investor buys a security that gives them the right to choose whether to get their money back or convert into common stock.

Part 1: Increase to Option Pool

In a typical term sheet, the investor will specify an option pool — a bucket of stock options for future employees. Having an agreed on pool makes life easier for everyone — you don’t have to get shareholder consent every time you want to make a new hire and the VC doesn’t see their ownership get diluted by every hire either.

How To: Negotiate a Term Sheet

Just got a term sheet from a VC firm? Congratulations — that’s no small feat. Now we’ll help you navigate how to negotiate your term sheet.

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