Deals

A fund typically requires approval from the Limited Partner Advisory Committee (LPAC) to proceed with a follow on investment in a portfolio that was an angel investment of the general partner because it's a conflict of interest. 

A fund typically requires approval from the Limited Partner Advisory Committee (LPAC) to proceed with a follow on investment in a portfolio that was an angel investment of the general partner because it's a conflict of interest. 

The platform currently integrates with Gmail, Microsoft Office 365 and SendGrid. We also recently released a Zapier integration for deal-flow and we have a number of additional integrations on the roadmap. 

The platform currently integrates with Gmail, Microsoft Office 365 and SendGrid. We also recently released a Zapier integration for deal-flow and we have a number of additional integrations on the roadmap. 

Go to: 1. Dealflow 2. Deal Memos 3. Add a deal Memo The tool is designed to ask you important questions about the deal and provide a good baseline. I would encourage you to also update these questions based on the approach of your thes...

Go to: 1. Dealflow 2. Deal Memos 3. Add a deal Memo The tool is designed to ask you important questions about the deal and provide a good baseline. I would encourage you to also update these questions based on the approach of your thesis. 

As a manager, you need to reach out and secure updates from portfolio companies and prospective portfolio companies on a regular basis. Decile Hub has CRM tools to manage this easily. A release is currently being developed to automatical...

As a manager, you need to reach out and secure updates from portfolio companies and prospective portfolio companies on a regular basis. Decile Hub has CRM tools to manage this easily. A release is currently being developed to automatically check in on portfolio companies every quarter to get an update through a form, and the form submission by the portfolio company will automatically update data in Hub.

VCs don't invest in LLCs. LLCs are pass through vehicles and issue K1s to all members, so all gains and losses are passed through to the fund, and the fund must pass them through to every LP. In addition to the MASSIVE accounting and tax...

VCs don't invest in LLCs. LLCs are pass through vehicles and issue K1s to all members, so all gains and losses are passed through to the fund, and the fund must pass them through to every LP. In addition to the MASSIVE accounting and tax headache, if a company is profitable and they don’t distribute dividends, VCs will need to report taxable income to their LPs.

A deal memo can help formalize your investment decision process. It provides an artifact to reference years later when you go back to look at your portfolio outcomes, exemplifies your process and values as a VC, and provides a vehicle fo...

A deal memo can help formalize your investment decision process. It provides an artifact to reference years later when you go back to look at your portfolio outcomes, exemplifies your process and values as a VC, and provides a vehicle for bringing on co-investors (or offering the deal to your LPs if there is room in the round). Hub provides a deal memo framework with template questions, ratings and attachments and links - this can be used for collaboration across your investment team, exported as PDF and shared as desired. Check out the VC Lab article: Venture Capital Deal Memo

Generally speaking, investing in non-voting shares of a pre-seed company is not recommended nor best practice.  Notwithstanding the traction and founder, if a Delaware domiciled startup is raising funding in a typical pattern, it typica...

Generally speaking, investing in non-voting shares of a pre-seed company is not recommended nor best practice.  Notwithstanding the traction and founder, if a Delaware domiciled startup is raising funding in a typical pattern, it typically raises on a SAFE (or similarly structured convertible instrument) - these will convert into Preferred Equity upon the company raising a priced round (Series Seed or Series A). Preferred Equity will most definitely have voting rights (in fact most of the time there is a separate lengthy legal agreement spelling these rights out). If such a startup is offering common stock to venture capital firms, with the added stipulation that these shares do not have voting rights, it warrants caution. 

The founders and employees of a startup must have vesting schedules to secure investment from reputable VCs. 

The founders and employees of a startup must have vesting schedules to secure investment from reputable VCs. 

A large percentage of pre-seed and seed investments are made with YC SAFE notes, in those cases the YC pro rata side letter is the accepted baseline, which provides a right to purchase shares in the following equity (conversion) round at...

A large percentage of pre-seed and seed investments are made with YC SAFE notes, in those cases the YC pro rata side letter is the accepted baseline, which provides a right to purchase shares in the following equity (conversion) round at the ratio of the SAFE investment to company capitalization. The YC templates are at https://www.ycombinator.com/documents For priced rounds (stock purchase) in the US, NVCA model documents are an accepted baseline https://nvca.org/model-legal-documents/ Regardless of investment vehicle, it is important for VCs to be fair in negotiation and especially not place demands on founders or create terms that could prove toxic to future fundraising efforts.

This is highly depended on the fund model and strategy. There is very big difference between pre-seed and seed. All factors considered here are some very high level guidelines: Pre-Seed:  ~50 companies Seed:         ~25 companies

This is highly depended on the fund model and strategy. There is very big difference between pre-seed and seed. All factors considered here are some very high level guidelines: Pre-Seed:  ~50 companies Seed:         ~25 companies

There are two types of anti-dilution protections for investors: full-ratchet and weighted average. They sometimes get used in priced rounds and are not typically found in Convertible Notes or SAFEs. These type of protections are not foun...

There are two types of anti-dilution protections for investors: full-ratchet and weighted average. They sometimes get used in priced rounds and are not typically found in Convertible Notes or SAFEs. These type of protections are not founder friendly. 

Sometimes, startups issue warrant coverage to sweeten the deal by providing investors with the opportunity to gain additional shares in the future at a lower price. Please note that most of the things you will 'hear' in the world of ven...

Sometimes, startups issue warrant coverage to sweeten the deal by providing investors with the opportunity to gain additional shares in the future at a lower price. Please note that most of the things you will 'hear' in the world of venture capital outside of Decile Base are wrong because there is little transparency in the industry.

A common approach is for you to request the data room from the company and do your diligence from their systems. Another approach is to customize your Investment Inquiries form. It allows for document uploads etc..

A common approach is for you to request the data room from the company and do your diligence from their systems. Another approach is to customize your Investment Inquiries form. It allows for document uploads etc..

There are a variety of factors that contribute to the investment timeline. For example, if you are the lead investor who is setting the terms, you will do significantly more due-diligence and try to help the company circle some more new ...

There are a variety of factors that contribute to the investment timeline. For example, if you are the lead investor who is setting the terms, you will do significantly more due-diligence and try to help the company circle some more new investors. On the other hand, if you are participating in a party round with no lead which is pretty common at the pre-seed stage, you may try to accomodate the rough timeline set by the founders and other investors. A typical process takes ~1 month. However during cyclical economic slowdowns or the holidays, it's not uncommon for this timeline to be extended to to 2 months or more.

It's possible for you to transfer your founder shares into the fund, however there are a number of issues with this approach. The shares are typically transferred at cost, and founders usually buy their shares at the onset of the company...

It's possible for you to transfer your founder shares into the fund, however there are a number of issues with this approach. The shares are typically transferred at cost, and founders usually buy their shares at the onset of the company at nominal price. The shares are typically common stock instead of preferred which means that they are lower in the preference stock. Finally, the company many not want to replace a founder with a fund on their cap-table because it may introduce diligence risk in future financings. 

"Rockstar" companies at the angel or pre seed stage are identified by their ability to quickly raise a subsequent round of funding. Since companies at this stage may not have any business or product traction, the ability to raise subsequ...

"Rockstar" companies at the angel or pre seed stage are identified by their ability to quickly raise a subsequent round of funding. Since companies at this stage may not have any business or product traction, the ability to raise subsequent rounds can be evaluated by (1) the pedigree of the Founder or founding team, (2) the quality of the accelerator or program that the startup has been through, (3) the popularity of the market that the startup is addressing, (4) the demand by other investors to participate in the current round, and (5) pre selling the next round to later stage investors and having initial signs of interest.

As a venture capitalist, you should not use any lockups or other exclusivity agreements with potential investments. These are one-sided arrangements that only favor the venture capitalist and can be harmful to the potential portfolio com...

As a venture capitalist, you should not use any lockups or other exclusivity agreements with potential investments. These are one-sided arrangements that only favor the venture capitalist and can be harmful to the potential portfolio company. Top accelerators, such as YC, have warned portfolio companies against entering into these arrangements as a result, and this can be harmful to your reputation as a VC is you using such agreements. The best alternate is to build a strong relationship with the portfolio CEO, encouraging them to save you position in the round based on the strength of your relationship and the assistance that you have provided.

You can use a standard template like the SAFE. We recommend that you do not modify template. 

You can use a standard template like the SAFE. We recommend that you do not modify template. 

We recommend that you do not attempt to draft a term sheet without a lawyer. However, you can use standard templates like the SAFE as long as you don't modify them. 

We recommend that you do not attempt to draft a term sheet without a lawyer. However, you can use standard templates like the SAFE as long as you don't modify them.