Wallen's

A map on termsheets and its negotiation

My last post on "a map of VC funding overall approach and process" focused mainly on the process and how to get going in a funding round. Once you've started pitching to some VCs, eventually you'll receive a termsheet. I tought it would be interesting to do a deep dive on this key milestone of the funding process: the termsheet and its negotiation.

Again instead of writing yet another post on this topic, I've build a map of blog posts that I organized along 2 buckets:

• Key points to keep in mind during the negotiation of the termsheet: overview followed by some specific points
• Termsheet items: overview followed by a deep dive on 3 important ones - liquidation preference, valuation and ratchets

I've also included an "appendix" with all the detailed definitions and some technical stuff... for those that are really motivated or those that want more details on one specific item.

Here is the map on termsheets and its negotiation : just click on the play button and the arrows to go back/forward.

A map of VC funding overall approach and process

There's been a lot of blog posts by VCs and entrepreneurs on how to approach VC funding, what the process looks like, explanation of termsheet items, etc. There are obviously different different views and opinions as well as various advices out there. Instead of writing yet other posts on these topics, I've done a map of blog posts on the topic and included the various perspectives out there.

I've started by a map on the overall approach and process of VC funding and organized it around 4 themes:

• An overview of the overall process
• The first question an entrepreneur should ask himself: how much money to raise and to achieve what ?
• Best practices on pitch documents (executive summary and first presentation)
• Some practical tips (e.g., on the first meeting, VC objections and the overall process)

Here is the map on "VC funding overall approach and process" (just click on the play button and the arrows to go back/forward). I'll build another map on termsheet and due dilligence in the coming days.

PS: If you have other posts to add to this map, don't hesitate to reach out.

Can governments create sector hubs?

Taylor Davidson has a good post on "Can governments create entrepreneurial and innovation hubs?". Interesting discussion out there. More broadly the question is can government economic policies help create sector hubs - be it innovative or not. Here was my comment on Taylor's post:

" [...] To broaden your question, a government action to put in place a given industry ecosystem (innovative or not) has been done numerous times in the past decades. Actually it was a standard policy in Europe after WWII (e.g., Airbus in France). It's also the strategy that successful developing countries have put in place (e.g., IT offshoring in India, manufacturing in China, but also smaller countries like Morocco). But there has been a lot of failures too (e.g., Latin America in the 60's and 70's). The success cases have in common to align (lots of) money, political will, education system, infrastructure investments, tax breaks, etc. In other words, there is no silver bullet. Moreover, the "new ecosystem" tends to build on an "adjacent" pre-existing ecosystem and culture. In any case, it's really a long term investment.

For "fixed cost" industries, you also need a critical element: "natural market" with large scale. The latter explains why, for example, the US software industry was more successful than in any European countries. Building on this software industry, the web sector came very naturally as an extension.
Based on this logic and considering that the web industry is slowly becoming a "variable cost" industry, I would argue that it is today less difficult to build web start-up ecosystems in new locations (though it will be difficult to reach Silicon Valley scale)."

The pre-dominant view in the past decades has been that of total "lassez-faire" but recent events has catch-up on this view. Just as entrepreneurs take actions to make "things happen", governments can also to a certain degree. History, culture, economic envrionment vary by country so the levers to use vary by country. My point is not to push for complete government intervention but like in everything there are various shades of grey...

Pearltrees public alpha is open!

There was a good reason for my lack of blogging these past 2 months: I was working on Pearltrees public alpha... and it is now open!

As Cratyle explains in the new english version of his blog, there are 3 immediate benefits you will get from Pearltrees:

“1- Organize the map of your Web.

By using peartrees’ plugin, you will turn your navigations into content maps. Drawing a map enables you to store and find back much more content than traditional bookmarks, to organize them much quicker (you don’t need to tag them, just to put them in the order you like) and to use them much more intuitively. When you want to know where you are in real life you use rather a map than a list. Your mind works just the same way on-line. That’s the reason why pearltrees will help you organize your web much more efficiently than bookmarks.

2- Guide your friends and readers through your Web.

By sharing your maps with your friends or your site audience, you will guide them through your Web navigations. Do you want to relate a discussion across blogs, comments and news-sites? Do you want to tell what happened, who answered what to who? Do you want to prepare a trip, to tell where you will go, what you will see, how to buy tickets in order to help a friend to come with you? Do you want to lead someone to a series of funny videos or through breaking news events? You can do all this just by sending a content map and letting people play this map.

3- Let yourself be guided through the Web

By playing the map of other pearltrees’ users, you will browse the Web in an entirely different way : not randomly, not through search engines, but by following a path organized by someone. You will discover the Web as if this someone was guiding you. It will not be the average someone actually, rather someone who knows it, someone who has something to tell about it, or just someone who likes it. By going from guide to guide, from map to map, you will discover an entirely new, humanly edited Web…”

Very concretely, here are a few examples of how I use Pearltrees in my everyday life (press on play and the arrows):

• Record over time interesting posts on freemium business model and organize them logically 
  
• Build a “swiss” perspective on the recent banking secrecy events (sorry in french)
• Discuss a holiday destination with my girlfriend
• A collaborative work tool to share information with my colleagues (e.g., conferences)
• Learn from other users’ on the credit crunch
• Discover new contents, e.g., fun videos (sorry in french again)
  

Basically, Pearltrees is the community of a new generation of web users: the web editors. They create guided navigations with existing web contents. Just as a newspaper chief editor or a museum curator, a web editor selects and organizes existing contents to build a meaningful story.

I can only invite you to join. We are still in alpha (a true alpha) and we still have a lot of work to improve Pearltrees... but your feedback will help us achieve this for everybody’s benefit.