Venture Capital Deal Terms: A guide to negotiating and structuring venture capital transactions

by Harm De Vries, Menno van Loon, Sjoerd Mol

This new book of investor Harm de Vries and VC lawyers Menno van Loon and Sjoerd Mol, who together have been involved in hundreds of venture capital transactions, explains all of the most common clauses used in VC deals.

The book provides an in-depth look on how venture capital deals are constructed and how deal terms work out in practice. It includes many examples, as well as negotiation tips for both entrepreneurs and investors and a full term sheet template as annex.

Furthermore, the book explains the economics behind the deal terms, which makes them easier to understand. The result is a practical guide to venture capital deals.

All venture capital transactions start out with the execution of a term sheet, a document summarizing the basic terms and conditions under which a potential investment will be made. A well-drafted term sheet serves as a tool to focus attention of the parties on the essential deal terms, and serves as an instrument to investigate whether there is common ground between them with respect to the most important investment conditions before they spend further time, energy and money on negotiating a deal. Effective participation in the negotiations of a venture capital transaction is possible only once each party involved fully understands the scope and consequences of all the deal terms included in the term sheet.

The book provides a clear understanding of the most frequently used practices, terms and conditions and will benefit anyone involved in venture capital transactions - investor, entrepreneur or advisor.

Genres: Business, Finance, Nonfiction

192 pages, Paperback

Published January 15, 2017

Reviews

[Quinten Selhorst · Rating 3 out of 5]

A nice and readable guide to negotiating and structuring fundraising transactions.

Compared to “Venture Deals” from Brad Feld and Jason Mendelson, this book doesn’t have the same finesse and rigorousness in terms of deal term tactics. However, I do believe that the books complement each other enough such that I would recommend other entrepreneurs to read both.

Furthermore, as the authors of the book are all Dutch, the book is leaning in a bit more towards the “Dutch/Rhineland perspective” regarding deal terms, compared to Venture Deals which is written from a more Anglo-Saxon perspective.

[Philip van den Heuvel · Rating 3 out of 5]

This books provides a very comprehensive overview of the terms contained in a Venture Capital transaction. It is however a bit too dry by covering all the common terms with some options one by one. Especially with some of the more important terms for negotiation, more context could be given also by possible negation strategies.

It is however nice to have a more Dutch/European view on term deals while also naming the differences with US and between several jurisdictions compared to books like "Venture Deals".

[Evatt Dixon · Rating 5 out of 5]

This is a solid book and I like it a lot. It is very straight to the point, and its awesome conciseness is in sharp contrast with the other famous book in the area, the Venture Deals. Venture Deals adopts a more colloquial style of writing, which may have made it more approachable for new readers. I read Venture Deals before this one, and I believe Venture Deals offered me a good general understanding in this area, which probably enabled me to have a smooth reading journey of this Deal Terms. I think this Deal Terms book is very useful in consolidate and solidify the knowledge in this area. Thanks to its refreshing conciseness, it will also function very well as a reference book.

[Robert Jan · Rating 3 out of 5]

Probably the most boring book I've read on VC, yet I would recommend it to anyone active in the industry, especially first time founders.

[Tanner Nelson]

This books introduces common terms one would encounter during venture capital funding rounds as an investor or a founder of a company. I was asked to read this book as part of my job, but I found it to be pretty interesting. I won’t rate it because it’s more of an educational book rather than a book that merits a score, but it’s definitely worth a read if you’re in the venture capital world.

[Brian · Rating 4 out of 5]

A straightforward description of the contents of a term sheet and the various options available to each party, with a good indication of standard practice. While Feld and Mendelsohn covered the same topic in more detail, this book is perhaps a little clearer on some topics.

[Brian]

Straightforward description of the contents of a term sheet and the options that are available to each parties. I think the Feld and Mendelsohn book on the same topic was more in depth, but this covers most areas effectively.