Customer Reviews

Term Sheets & Valuations - A Line by Line Look at the Intricacies of Venture Capital Term Sheets & Valuations (Bigwig Briefs)

5 star:		(21)
4 star:		(2)
3 star:		(5)
2 star:		(1)
1 star:		(0)

 

 

When I first received this book, I was disappointed because of its short length (106 pages). I could not have been more wrong, the book is very comprehensive. I bought this book because I was involved in a Private Equity transaction on the entrepreneur side of the transaction. We had received a term sheet from the investor and I needed to get educated about this stage of the transaction. The investor that submitted the term sheet was not using one of the 5 typical formats, so Wilmerding's approach of describing the various clauses in the term sheet and the effects on the parties was of critical importance to our transaction. As the other reviewers have mentioned, the author describes the various clauses as investor favorable, middle of the road, or company favorable. This approach was helpful in developing several ideas for "push backs" in our negotiation. The author also helped highlight "red flags" to be aware of and described their significance. The author also highlights where it is important to retain experienced council to avoid legal pitfalls.

This book is a step by step cookbook for navigating the first critical steps in each round of financing a new company will do. Ignore his advice at your own financial peril.

This is a first rate book-regardless if you are a seasoned venture capitalist or first time entrepreneur. Having been a venture capitalist for 22 years now, the term sheet in this book is boilerplate-but it is 1 of the 4 boilerplate term sheets every legitimate lawyer/venture capitalist uses as a term sheet-and available for the first time ever in the "public domain." In addition, what makes the book so valauble is the line by line wording and analysis for entrepreneur favorable, investor favorable and neutral. I highly recommend this book to every entrepreneur, venture capitalist, and executive of every level-it is a MUST have on your bookshelf as a timeless reference.

An excellent book for beginners, but lacking an in-depth analysis of why term sheet are built in a certain way. Most of the content is boilerplate and useful for somebody that has never seen a deal term sheet. The comparative approach on content is good. For the price, it is a good shelf acquisition, though.

The author takes standard term sheets and analyzes each key section according to what is investor favorable, company favorable, or neutral. This is a great approach, as it enables to explore the potential extremes in a term sheet section.
The examples are indeed boilerplate, but it nevertheless serves as an excellent introduction to term sheets. I've been able to apply the concepts discussed in the book to the analyses of term sheets at our firm...a testament to this book's utility. Overall, an excellent value.

I would spend $1,000 for this book - simply put. Even though I am a VC, I was completely awe struck by the detailed information on raising capital, term sheets and valuations this book presented. Besides having great insight into raising venture capital, the highlight of the book is clearly an actual term sheet, put together by one of the leading law firms, with line by line descriptions of what the wording means and actual "legal wording" for "investor favorable," "entrepreneur favorable," and "neutral" terms. This is information you pay $20,000 for with your lawyers. This book is a must have for any entrepreneur, venture capitalist or financial executive.

This is by far the most widely used title by every venture capitalist. I would highly recommend this book to every vc, lawyer, and management team member (especially) of every company looking to obtain venture financing. You could not find better advice on negotation points, changes to wording or overall guidance on a term sheet than Wilmerding's advice in this book. Especially look at Chapter 3 where Wilmerding goes through line by line what every parapraph means on a term sheet. Also check out Wilmerding's other book, Deal Terms, or Raising VC From a Tier 1 Firm (which includes the entire text from Term Sheets & Valuations and Deal Terms).

After having this book referred to me by about 7 of my venture capital friends I decided to take a look. Well, I was very impressed as this is the first venture capital book I have seen to provide a true insider's perspective. This book literally tells you exactly the wording you need to use to make the section applicable to you - whether you are a:

Venture Capitalist

Entrepreneur

Lawyer

Etc.

Look at the below section and the detail it provides (you should note the book itself goes on to explain what this entire section means and what each section specifically does):

(4) Conversion: [Investor Favorable, Middle of the Road and Company Favorable are the same.]

The holders of the Series [A] Preferred shall have the right to convert the Series [A] Preferred, at any time, into shares of Common Stock. The initial conversion rate shall be 1:1, subject to adjustment as provided below.

(5) Automatic Conversion:

Investor Favorable:

The Series [A] Preferred shall be automatically converted into Common Stock, at the then applicable conversion price, (i) in the event that the holders of at least two thirds of the outstanding Series [A] Preferred consent to such conversion or (ii) upon the closing of a firmly underwritten public offering of shares of Common Stock of the Company at a per share price not less than [3 times the Original Purchase Price] per share and for a total offering with net proceeds to the Company of not less than $40 million (a "Qualified IPO").

Middle of the Road:

The Series [A] Preferred shall be automatically converted into Common Stock, at the then applicable conversion price, (i) in the event that the holders of at least two thirds of the outstanding Series [A] Preferred consent to such conversion or (ii) upon the closing of a firmly underwritten public offering of shares of Common Stock of the Company at a per share price not less than [2 times the Original Purchase Price] per share and for a total offering with gross proceeds to the Company of not less than $25 million (a "Qualified IPO").

Company Favorable:

The Series [A] Preferred shall be automatically converted into Common Stock, at the then applicable conversion price, (i) in the event that the holders of at least a majority of the outstanding Series [A] Preferred consent to such conversion or (ii) upon the closing of a firmly underwritten public offering of shares of Common Stock of the Company at a per share price not less than two times the Original Purchase Price (as adjusted for stock splits and the like) and for a total offering of not less than $5 million, before deduction of underwriters commissions and expenses (a "Qualified IPO").

This book was extremely informative for someone like me. I am the 3rd person into a start-up that is in the midst of looking for 1st round VC funding. This is a great book for budding entrepreneurs as it gives important info not only on the intricacies on term sheets and valuations but also an inside look on how the VC industry itself works both on the East Coast and on the West Coast. Great book. I highly recommend it.

Term Sheets and Valuations analyzes the finer details of VC term sheets within a framework of what are "investor favorable", "middle-of-the-road", or "company favorable" elements. While this format is helpful, the excerpts are sometimes a bit hard to follow. Not being an attorney, I found this a somewhat arduous read, especially for such a short book.

A better format would have been to include three separate term sheets properly marked up to highlight key differences. This would have required four documents: the book and three separate term sheets. Despite the increased printing costs, it would have been well worth it.

Another problem with the book is the lack of valuation information. Given the title, I would have expected extensive valuation examples. There really aren't any, sadly. This appears to have been done for extreme brevity.

The author does deserve credit for distilling a subject into a rather brief text. Given the limited population that would truly be interested in the nuances of term sheets, his attempt at this book was rather admirable.

I was very impressed with this book, as it provides an ACTUAL term sheet with line by line wording for entrepreneur favorable, investor favorable and neutral. It also goes into detail on valuations, comparables and other important issues that affect every term sheet. By far the best VC type book I have read so far-this book is a must have on the bookshelves of every financial professional, executive, vc or entrepreneur.