Brad Feld > Quotes

“Failure is a key part of entrepreneurship, but, as with many things in life, attitude impacts outcome”
― Brad Feld, Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist

“as you'll learn, there really are only two key things that matter in the actual term sheet negotiation—economics and control.”
― Brad Feld, Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist

“While the range of people, organizations, resources, and conditions involved in an entrepreneurial ecosystem are useful to understand, they are not the most critical construct. Instead, the interaction between each of the components is what matters.”
― Brad Feld, The Startup Community Way: Evolving an Entrepreneurial Ecosystem

“A lot of people rely on the same arguments over and over again when negotiating. People who negotiate regularly, including many VCs and lawyers, try to convince the other side to acquiesce by stating, “That's the way it is because it's market.” We love hearing the market argument because then we know that our negotiating partner is a weak negotiator. Saying that “it's market” is like your parents telling you, “Because I said so,” and you responding, “But everyone's doing it.” These are elementary negotiating tactics that should have ended around the time you left for college.”
― Brad Feld, Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist

“Entrepreneurship itself is an emergent system, where companies create the conditions for experimentation and learning to occur, often symbiotically with customers. In 1978, Eric von Hippel (my PhD advisor at MIT) pioneered the notion of user-driven innovation.10, 11 Back then, the conventional wisdom was that innovation only came from corporate, government, and university research-and-development labs. While some still believe this today, Eric's insight proved to be prescient in many areas, especially in the information age, as the widespread adoption of open-source software and Lean Startup methodologies have demonstrated.12 Twitter is a tangible example since three of the platform's most popular features—the @ reply, the # hashtag indexing, and retweet sharing—were all generated bottom-up by users.”
― Brad Feld, The Startup Community Way: Evolving an Entrepreneurial Ecosystem

“Most contemporary option plans have provisions whereby all granted options fully vest immediately prior to an acquisition should the plan and/or options underneath the plan not be assumed by the buyer. While this clearly benefits the option holders and helps incentivize the employees of the seller who hold options, it does have an impact on the seller and the buyer. In the case of the seller, it will effectively allocate a portion of the purchase price to the option holders. In the case of the buyer, it will create a situation in which there is no forward incentive for the employees to stick around since their option value is fully vested and paid at the time of the acquisition, resulting in the buyer having to come up with additional incentive packages to retain employees on a going-forward basis. Many lawyers will advise in favor of a fully vesting option plan because it forces the buyer to assume the option plan, because if it did not, then the option holders would immediately become shareholders of the combined entities. Under the general notion that fewer shareholders are better, this acceleration provision motivates buyers to assume option plans. This theory holds true only if there is a large number of option holders. In the past few years we've seen cases where”
― Brad Feld, Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist

“The complex nature of today's innovations requires teams of people with diverse skills. As Victor Hwang and Greg Horowitt describe in their book, The Rainforest: The Secret to Building the Next Silicon Valley, we are in need of diverse teams more than ever, but we are unfortunately hardwired to distrust people who are different from us. The ability to consistently overcome this limitation of human nature separates vibrant innovation systems from the others.”
― Brad Feld, The Startup Community Way: Evolving an Entrepreneurial Ecosystem

“assert control over the protective provisions”
― Brad Feld, Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist

“Social capital, or “networks of trust,” are rooted in relationships based on a common set of norms and values that bind a group of individuals together and enable them to collaborate more effectively. Networks of trust are critical in complex systems that demand high performance under fast-paced, ambiguous, and evolving conditions. Successful outcomes in military special forces, modern aviation, championship sports, and hyper-growth startups all require teamwork that is grounded in trust and a shared sense of purpose.”
― Brad Feld, The Startup Community Way: Evolving an Entrepreneurial Ecosystem

“Hierarchies are best suited for situations that require tight control of production, information, or resources, such as manufacturers or large bureaucracies that exist in universities, governments, and militaries. Hierarchies are robust and inflexible, requiring formal rules, standard operating procedures, and a chain of command. In contrast, networks are resilient and adaptable, requiring flexibility and horizontal flows of information. Healthy startup communities rely upon unencumbered information flows organized in network-based structures. Conversely, they suffocate under hierarchical control.”
― Brad Feld, The Startup Community Way: Evolving an Entrepreneurial Ecosystem

“In either case, before you jump through hoops providing this information, make sure a partner-level person (usually a managing director or general partner) is involved and that you aren’t just the object of a fishing expedition by an associate.”
― Brad Feld, Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist

“Outside board members are usually compensated with stock options—just like key employees—and are often invited to invest money in the company alongside the VCs.”
― Brad Feld, Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist

“rhetorical appeal to make the local research university the next—and you can fill in the”
― Brad Feld, Startup Communities: Building an Entrepreneurial Ecosystem in Your City

“The only thing that we know about financial predictions of startups is that 100 percent of them are wrong. If you can predict the future accurately, we have a few suggestions for other things you could be doing besides starting a risky early stage company. Furthermore, the earlier stage the startup, the less accurate any predications will be. While we know you can't predict your revenue with any degree of accuracy (although we are always very pleased in that rare case where revenue starts earlier and grows faster than expected), the expense side of your financial plan is very instructive as to how you think about the business. You can't predict your revenue with any level of precision, but you should be able to manage your expenses exactly to plan. Your financials will mean different things to different investors. In our case, we focus on two things: (1) the assumptions underlying the revenue forecast (which we don't need a spreadsheet for—we'd rather just talk about them) and (2) the monthly burn rate or cash consumption of the business. Since your revenue forecast will be wrong, your cash flow forecast will be wrong. However, if you are an effective manager, you'll know how to budget for this by focusing on lagging your increase in cash spend behind your expected growth in revenue.”
― Brad Feld, Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist

“There are only a few key things most VCs look at to understand and get excited about a deal: the problem you are solving, the size of the opportunity, the strength of the team, the level of competition or competitive advantage that you have, your plan of attack, and current status. Summary financials, use of proceeds, and milestones are also important. Most good investor presentations can be done in 10 slides or fewer.”
― Brad Feld, Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist

“Government runs in short time cycles, usually less than four years. It often feels like we are in an endless campaign cycle and, in some cases, at least half of the activity of government leaders feels like it is around the process of getting reelected. After an election, there is often a three-month lame-duck period where nothing happens, followed by a six-month period as the new administration gears up, puts new leaders in place, makes its plans, does its studies, writes its reports, and then launches its new initiatives. That’s nine months of a four-year cycle wasted.”
― Brad Feld, Startup Communities: Building an Entrepreneurial Ecosystem in Your City

“When we meet people who say they are “trying to raise money,” “testing the waters,” or “exploring different options,” this not only is a turnoff, but also often shows they've not had much success. Start with an attitude of presuming success. If you don’t, investors will smell this uncertainty on you; it'll permeate your words and actions.”
― Brad Feld, Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist

“If you feel like your VC is a proctologist, run for the hills.”
― Brad Feld, Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist

“The most powerful mentor/mentee relationships are those in which the mentor and the mentee ultimately become peers.”
― Brad Feld, Startup Communities: Building an Entrepreneurial Ecosystem in Your City

“Honesty is certainly a virtue, but it can also be used as a form of power or to hurt your partner or to abdicate responsibility for the impact your words can have on each other. “I’m just being honest” can also be a way of saying “I don’t care about whether my words are hurtful or unkind.”
― Brad Feld, Startup Life: Surviving and Thriving in a Relationship with an Entrepreneur

“What's wrong with getting great terms? If you can't back them up with performance when you raise your next round, you may find yourself in a difficult position with your original investor. For example, assume you are successful getting a valuation that is significantly ahead of where your business currently is. If your next round isn't at a higher valuation, you are going to be diluting your original shareholders—the investors who took a big risk to fund you during the seed stage. Either you'll have to make them whole or, worse, they'll vote to block the new financing. This is especially true in cases with unsophisticated seed investors who were expecting that, no matter what, the next round price would be higher.”
― Brad Feld, Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist

“In 1957, the venture capital industry was just being created. At the time, the investor community in the United States was uninterested in investing in computer companies, as the last wave of computer-related startups had performed poorly and even large companies were having difficulty making money in the computer business. We can envision the frustration of DEC’s cofounders, Ken Olson and Harlan Anderson, as the investors they talked to rejected them and their fledgling idea for a business. We can also imagine their joy when Georges Doriot, the founder of American Research and Development Corporation, offered to fund them. After a number of conversations and meetings, Doriot sent Olson and Anderson a letter expressing his interest in investing, along with his proposed terms. Today, this document is called the term sheet.”
― Brad Feld, Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist

“A contemporary example of holistic thinking is found in the approach Mark Suster and his firm Upfront Ventures took in helping evolve the Los Angeles startup community. A decade ago, many perceived LA as a small, relatively unimportant startup community. Mark and his partners at GRP Partners rebranded the firm Upfront Ventures in 2013 and began a concerted effort to amplify, publicize, and evolve the LA startup community. Mark was unapologetically bold about the awesomeness going on in LA. He started an annual Upfront Summit that was inclusive of all LA entrepreneurs, bringing venture capitalists and limited partners from around the country to LA for a two-day event showcasing everything going on in the region. By approaching the problem holistically, rather than attempting to solve one particular issue or to control things, Upfront dramatically accelerated the LA startup community while at the same time building an international brand for the firm.”
― Brad Feld, The Startup Community Way: Evolving an Entrepreneurial Ecosystem

“alcanzando en tu primera ronda de capital riesgo se trasladarán a todas las futuras rondas.”
― Brad Feld, Cómo cerrar rondas de financiación con éxito