By guest authors Irina Patterson and Candice Arnold Jim: So, as I was saying, “the valley of death” [for a technology startup company] is the place between, roughly, the $100,000 that you can raise on your own and maybe the $2.5 million or $3 million, which is the level at which a venture capital firm
By guest authors Irina Patterson and Candice Arnold This is the forty-fourth interview in our series on financing for entrepreneurs. I am talking to Jim Jaffe, the CEO of the National Association of Seed and Venture Fund (NASVF). Philadelphia, Pennsylvania–based NASVF is a global non-profit with over 600 individual members in 43 states and four
By guest authors Irina Patterson and Candice Arnold Irina: What else do entrepreneurs need to understand about venture funding? Brian: There are five- or ten-year time frames before you have success, so you have to really be aligned with your investor on the vision, what you hope to accomplish, what hurdles you’re going to see
By guest authors Irina Patterson and Candice Arnold Irina: What is your preferred type of investment? Brian: It’s preferred shares in a traditional equity financing. If we do a note, it’s usually a convertible piece of debt with a cap. Going back to that original comment, we don’t like our money being used to drive
By guest authors Irina Patterson and Candice Arnold Brian: I already mentioned how inundated we are just trying to keep up with the deals we have coming to us. I would never sleep if then tried to turn around on every deal that we pass on and try to make other introductions on their behalf.
By guest authors Irina Patterson and Candice Arnold Irina: We talked about entrepreneurs’ past experience and how much weight it carries when they are looking for funding. Brian: It’s obviously better if you can grab, as an example, a Brian Lee, who is a co-founder of LegalZoom, and then founded Shoe Dazzle. You can look
By guest authors Irina Patterson and Candice Irina: What your usual round size? Brian: I would say that $500,000 to $1.5 million seems to be the magic number for seed rounds; therefore, the valuation could be as low as $1 million and as high as $4 million or $5 million for that level of dilution
By guest authors Irina Patterson and Candice Arnold Brian: If we’re rude in how we go about saying no to entrepreneurs, they’re not going to be likely to come back to us with the next idea. For all intents and purposes, we could be wrong. This current idea may be a brilliant one. It just