arshhaque.com/Impact Ventures/Fall 2024/
Teams & Deal Terms
Teams & Deal Terms

Teams & Deal Terms

Date
Nov 7, 2024
Assignment
Canvas: Choose 3 startups
Session
6
Agenda
Recording for ClassAnnouncements & FeedbackTheoryTerm SheetsTeam PersonasExamplesApplicationAssignment
 

Recording for Class

Start Recording
Link Available
Video Conferencing, Web Conferencing, Webinars, Screen Sharing
Zoom is the leader in modern enterprise video communications, with an easy, reliable cloud platform for video and audio conferencing, chat, and webinars across mobile, desktop, and room systems. Zoom Rooms is the original software-based conference room solution used around the world in board, conference, huddle, and training rooms, as well as executive offices and classrooms. Founded in 2011, Zoom helps businesses and organizations bring their teams together in a frictionless environment to get more done. Zoom is a publicly traded company headquartered in San Jose, CA.
Video Conferencing, Web Conferencing, Webinars, Screen Sharing
https://pdx.zoom.us/rec/share/jDRQ_avu96qiIUkX-cUoGb63wrIr0D8HPJL6JJlN6k7qC1wK2UssJDAM2SPjqprJ.mKOt-lMAl88zjLBu
Video Conferencing, Web Conferencing, Webinars, Screen Sharing
 

Announcements & Feedback

  • Arsh will fix the website
  • Reminder on grading
    • 18/20 = A, complete the template
    • 20/20 = Closer to real-world quality
  • If you want more personalized feedback — request by email or schedule a call
  • Review the presentation next week - Link
  • Review my pitch deck if we want to
 

Theory

Abaca Venture Levels
Level
Typical Funding
Investor Exit
9
Acquirer IPO
We're on the cusp of producing an exit.
8
VC: Series C, D+
We've turned some acquisition offers already.
7
VC: Series B, C
We're fundraising from VC; we're in later stages of negotiations.
6
VC: Series A
We've identified our ideal investor & negotiation is on track.
5
VC: Seed + Angel
Serious investors are considering our business.
4
Angel Friends & Family
We're planning out pricing experiments & exploring investors.
3
Angel Friends & Family Personal Credit
An investor suggests we could hit the market soon.
2
Friends & Family Personal Credit
Investors are helping us refine the plan.
1
Friends & Family Personal Credit
We have informal conversations with potential investors.
 

Term Sheets

notion image
Pre-Money vs. Post-Money Valuation Explained - Capbase...
Your pre-money value refers to your company's agreed-upon value right before raising funds, while its post-money value refers to what the company's worth will be immediately after.
Pre-Money vs. Post-Money Valuation Explained - Capbase...
https://capbase.com/pre-money-vs-post-money-valuation/
Pre-Money vs. Post-Money Valuation Explained - Capbase...
YC Safe Financing Documents | Y Combinator
US companies There are three versions of the post-money safe intended for use by US companies, plus an optional side letter. Non-US companies As of March 2021, we're unveiling beta versions of the "Valuation Cap, no Discount" post-money safe and optional side letter for companies formed in Canada, the Caymans and Singapore.
YC Safe Financing Documents | Y Combinator
https://www.ycombinator.com/documents
YC Safe Financing Documents | Y Combinator
Valuation Example
Pre-Money $8M
Investment + $2M
Post-Money = $10M
 
% Ownership
= 20% = $2M/$10M
 
Valuation Formula
Pre-Money Valuation
+ Investment
= Post-Money Valuation
 
% Ownership
= X% = Investment/Post-Money Valuation
6 Components of a VC Startup Term Sheet (Template Included) | Visible.vc
Raise capital, update investors and engage your team from a single platform. Quick Navigation Try Visible free for 14 days . Term sheets can be intimidating as a first-time founder. As it is likely the first time you've seen a term sheet, the intricacies of the deal can be difficult to understand.
6 Components of a VC Startup Term Sheet (Template Included) | Visible.vc
https://visible.vc/blog/term-sheet-template/
6 Components of a VC Startup Term Sheet (Template Included) | Visible.vc
Other Terms
Economic
Liquidation Preference
In what order to people get exit $
Conversion to Common Stock
In order to get a better liquidation preference
Dividends
% of profit
Control
Voting Rights
Ex. whether or not to approve acquisition
Board Structure
A different kind of voting right
Drag Along
A smoother way to exit
 

Team Personas

notion image
 

Examples

Toast
We recommend a $17.5M investment in the $24M first institutional round of Toast, a Boston based company selling restaurant point of sale (POS) software.
Toast
https://www.bvp.com/memos/toast
Toast
Wix
We recommend BVP invest $2mm in the second seed round of Wixpress Ltd., a Tel Aviv-based consumer software company that has developed an easy-to-use, rich media authoring environment for mass market users building web content such as websites and widgets.
Wix
https://www.bvp.com/memos/wix
Wix
 

Application

Pick a tag (e.g., YCombinator, industry) and illustratively complete the assignment together.
Invest in founders building the future | Wefunder, Home of the Community Round
Get equity and front row seats to the startups and small businesses you love—for as little as $100.
Invest in founders building the future | Wefunder, Home of the Community Round
https://wefunder.com/
Invest in founders building the future | Wefunder, Home of the Community Round
 

Assignment

From your 3 startups, consider the deal terms and choose 1 to “invest in”.
 
Optional: Draft an investment memo section that how you conceptualized deal assessment (e.g., what a "reasonable valuation" was) to the data you found available on WeFunder. Optional: Take the investment sections you’ve drafted so far and create a presentation out of it. Consider trying out Gamma if you haven’t already - Link.