How to Raise Money from a Venture Investor

So you've decided raising venture capital is the best fundraising strategy for your startup. Now what?

In this second of a 3-part series, a16z Managing Partner Scott Kupor shares actionable fundraising advice based on his experience of seeing thousands of startup pitches and working on all of a16z's investments.

In this episode, Scott discusses the following with a16z Deal & Research Partner Frank Chen:

- Why is it easiest for venture investors to fund Delaware C Corps?

- What should you do if you're planning to start a company but are still employed?

- What much money should you raise?

- What do you need to be careful of when raising a convertible note?

- Is there such a thing as too high a valuation?

- Congratulations, you got a term sheet or three. Now what?

- How should you think through some of the economic terms of your term sheet?

- What about the governance terms?

- What are liquidation preferences, and what is the most startup friendly kind of liquidation preferences?

- What are other examples of deals "with structure"?

- Should you try to get a dual-class voting structure similar to Google and Facebook?

- What kind of transfer restrictions should I put on the company's stock?

- When should I recruit an independent board member? What should I look for?

- What kind of pro-rata rights should you get? How should you think about the way your existing investors will invest in future rounds?

- What vesting schedule should you use for founder shares and employee stock options?

Want to learn more? Read Scott's book "Secrets of Sand Hill RoadVenture Capital and How to Get It" ().

Part 1 of the series, “How to Understand and Choose a Venture Investor”

This video is part 2.

Part 3 of the series, "How to Raise Money from a Venture Investor":

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