Customer Reviews

Venture Capital Investing

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You might not expect a book published 12 years ago to be all that useful in creating your zippy new high-tech Internet-based business plan. But because it describes the perspective of the investor who is considering the commitment of other people's money into a small business, this book is indeed extraordinarily useful and well worth the price.

The book does not tell you how to create a sure-fire business plan -- that kind of information needs to come from a source that relates to your industry and type of business.

What this book does do, and very successfully, is compile the enduring fundamentals: including 80 pages of questions used in due diligence, 40 pages of sample investment documents, to name two examples. And these are just the appendices that follow 250 pages of investor-to-investor discussion of what to look for and what works on the front lines of venture capital investing.

This book is not written for the entrepeneur, which is exactly why it is so useful if you are writing a business plan. If you are an entrepeneur who is good at thinking through both sides of business deals, this book gives you a lot to work with in trying to understand how you and your proposals will be considered by a venture capital investor.

This book is not geared toward modern, big-ticket, ultra-risky venture capitalists. You won't find any eBay case studies here, nor any advice on how to finance such.

Instead, the author's focus has a small-time, mezzanine debt flavor. Think lower-risk, low to mid-tech deals; smallish companies, such as printers, with existing business models and revenue streams, in search of expansion capital.

The proposed structures are safe (secured, convertible debt) and the bulk of the book consists of due diligence checklists.

The writer's conservatism is both the virtue and the limit of this book. Depending on your needs and beliefs, you'll find it either reassuring and methodical, or stodgy and old-fashioned.

This book is good for beginners who want to know more about the VC process, but it needs to be updated for modern practices. It also needs to be edited for gramatical errors, which I found unacceptable given the price of the book.

If you are truly interested in private equity either as a student, angle investor, or professional, then I recommend a book by Josh Lerner: "Venture Capital & Private Equity - a Casebook". It is very thorough and modern.

I was impressed with the thoroughness that Mr. Gladstone gave to the due diligence process, arguably the key to closing a successful VC deal. Particularly useful are the 80 pages of 'must ask' questions he provides. If anything, these are worth the price of the book.

This book is the best I have found on analyzing companies for private investment. David Gladstone provides step-by-step instructions on how to analyze a company for private investment purposes. I highly reccommend it for venture capitalists, private investors, and angels

Investing in a small private business is difficult. There is not enough information and it is almost impossible to find a buyer for your investment if you need to sell your investment. This book provides the investor with a detailed approach to investing in private businesses. The book discusses the process one should go through before investing in a private business. It is detailed and directly to the point of what an investor should look for and what things the investor should do. If you are thinking of investing in small private businesses then this book is for you. If you are seeking to raise money then purchase my other book "Venture Capital Handbook" that is for business owners who want to raise money.

The subtitle of this book advertised it as "the complete handbook for investing in small private businesses for outstanding profits" and this description is not inaccurate. Overall, the book covered the major topics of venture capital investing and had many practical stories and tips for how to invest in businesses. A key word of the subtitle, however, is "small." Unlike many other books on venture capital investing, Gladstone focused on smaller companies and that made the book more practical and useful for the beginning venture capitalist. Even though the book was written several years before the internet became widespread, its advice and lessons are still applicable today. Especially valuable are the appendices filled with questions used for the business investigations, legal and other forms for venture capital investing, and entrepreneur evaluation studies.

The main flaw of the book is its briefness with less than 400 pages. With this amount of space, it is almost impossible to explain and review carefully every aspect of venture capital investing. The result is a book that does an excellent job on the basics but does not explore in-depth the finer points of venture capital investing.

Much updated from previous editions, David Gladstone's useful text provides a very cursory survey of deal and investment techniques, albeit for slightly later than "sexy" stage deals. However, as this book is designed for the novice, and as Lipper's text has fallen out of print, this sadly remains the only general text on VC investing for the inexperienced, and is useful in context of the level which it is designed to educate. While the many checklists may be somewhat annoying to seasoned VCs, they are probably indispensable to the novice investor, since they provide a summary framework when working through deal and business terms. And while the book is designed more for later stage (through certainly not LATE stage, as some have alluded to) deals, the book is, again, designed to educate the novice venture investor, who really shouldn't be doing high tech start-ups anyway. Irrespective of that, anyone who presumes to write a text on investing in high tech start ups would likely find his text applicable only for the next few months after printing. Ours is an industry that evolves very quickly, and changes rapidly in accordance to the latest trends. No one can teach you how to pick the winners in the trend that hasn't happened yet. Getting the basics from a text like Gladstone's, however, can give you the fundamentals on which to build that "knack".

After reading some previous previews, I thought it would be appropiate to respond. One reader stated that the material in the book was updated with old school material and a lot of check off list and did not focus on the big ticket deals. Well, no one book will contain every little detail of the business in all reality as some may desire. This books provides a great foundation or a starting point for the industry of venture capitalism. Anyone that masters with basic material will have no problem using common sense to build upon this knowledge with current issues of today. Besides, the author enclosed contact information for getting more information about venture capital training or information within the book. Let me close with this, if you are serious about learning about the venture capital industry then this is a SUPERIOR book to begin with. And if you become an astute student of venture capital industry then obviously this book will only be the beginning stage of your venture capital education. And also this book is great for entrepreneurs!(Understand those whom you plan to deal with$$$)...

Mr. Gladstone's book provides an excellent overview of venture capital investing and what it takes to succeed. The book is extremely well written and to the point. A must read for anyone thinking of working or investing in the venture capital arena.