Brad Feld: what founders need to know about recent changes in VC deal terms

Extra Crunch offers members the opportunity to tune into conference calls led and moderated by the TechCrunch writers you read every day. This week, TechCrunch’s Connie Loizos hopped on the line with prominent investor, entrepreneur, thought leader, and Techstars co-founder Brad Feld to discuss the latest edition of his book “Venture Deals”, his advice to founders and investors, and his take on hot button issues of the day (including dual-class shares, direct listings, and what happened at WeWork).

In their conversation, Brad and Connie discuss the need to know information when it comes to preparing for, structuring and executing venture deals, and how that information has changed over the past several decades. Feld walks through the major topics that have been added in the latest edition of the book, such as how to handle venture debt, as well as tactical attributes that aren’t currently in the book, such as secondary market trading.

Brad also gives his take on the most effective fundraising tactics for founders, and what common pieces of advice might be overblown.

Brad Feld: “I think the approach to the amount of money that you’re raising is both nuanced and evolves based on what financing round you’re at. So if you’re in an early round, some of the characteristics are different than if you’re in a later round. But I think the general truism… that I like to use when people say, “Well, how much money should I raise?”

I start with two variables and you the entrepreneur get to define those two variables. The two variables are: the amount of money you raise and what getting to the next level means. The amount of money you should raise is the amount of money that you need to get your business to the next level. There are lots of different ways to define what next level is and by forcing yourself internally to define next level and then define what you need in terms of capital to get to that next level… when you’re raising that first round of financing or even the second or third round of financing, it helps you size rationally what you need versus reactively to whatever the market characteristics are.

I actually encourage entrepreneurs to raise the least amount of money they need to get to the next level, or at least that’s the number that they go out to market with. Not a range, not a big number because you’re trying to drive some kind of valuation characteristic off a big number, but the amount of money that you actually think you need to get to the next level. Then if you can be oversubscribed, that’s an awesome situation.”

Feld and Connie dive deeper into current issues in the startup and venture landscape, including Brad’s take on the impact of the SoftBank Vision Fund, what went down at internally and externally at both WeWork and Uber, as well as how boards, executives and founders can manage cult of personality and static company cultures.

For access to the full transcription and the call audio, and for the opportunity to participate in future conference calls, become a member of Extra Crunch. Learn more and try it for free. 

Connie Loizos: I think the last time I saw you in person was out here in San Francisco at an event I was hosting and that was maybe two years ago?

Brad Feld: Yup, that’s right. That was at the Autodesk Lab if I remember correctly.

Loizos: Yes. It’s good to hear your voice, and thank you for joining us on this call. We have a lot of readers who are big fans of yours that are on the line and are eager to learn about your book “Venture Deals” and your broader thoughts about the current state of the market. And that said, I know you only have so much time, so let’s dive first into the book. So ‘Wiley’, your publisher has just put out the fourth edition of this book “Venture Deals”, and it’s really easy to appreciate why. I was looking through it and it’s so incredibly useful about how venture deals come together and possible pitfalls to avoid. And given there are always new entrepreneurs emerging, it continues to be highly relevant.

Can I ask you, so how do you go about updating a book like this, given that some things change and some things stay the same?

Understanding mental health in Silicon Valley, with professional coach and former investor Jerry Colonna

Extra Crunch offers members the opportunity to tune into conference calls led and moderated by the TechCrunch writers you read every day. TechCrunch’s Connie Loizos recently sat down with VC-turned-professional coach Jerry Colonna for a chat about founder mental health, his less than predictable career path and his new book Reboot: Leadership and the Art of Growing Up.

After years as a successful venture investor, Colonna found himself confronting his own personal struggles with mental health. As a result, Colonna shifted his focus towards coaching founders and executives through the tensions that exist between personal happiness, mental health and traditional leadership practices.

In his book and in his conversation with Connie, Jerry discusses how one’s previously developed standards of success can impact their ability to lead and realize fulfillment from their work. Jerry elaborates on why many Valley executives encounter mental health pressures as their careers evolve, and details advice he gives to his own clients to help them re-engage with themselves.

“First, to unpack that ambition itself, is not a negative. It’s just ambition. But when we don’t understand the context of that ambition, what is it that’s driving us forward? Is it fear? Or is it excitement and enthusiasm about what’s possible?

Generally, it’s about both, right? When our ambition is primarily unconsciously driven be our fear, the likelihood is high that we’re going to drive the people who work for us crazy. Because nothing that they do, is ever going to make the fear go away. No matter how successful our ambition makes us.

Because the underlying motivation is fear. I am looking to become safe by what I’m driving towards. Now, if we were to flip it and say the thing that is really driving the ambition, is dreaming of a world that is possible. “I can’t imagine how cool it would be if this company were X.” Well, I may still act in a way that’s driven, but I don’t necessarily have to drive the people around me crazy.

And so by understanding the complicated nature of that word ambition, we get to, as I say, dial up the positive aspect of it and release a little bit from the less healthy more negative aspects of it.”

Jerry and Connie dive deeper into how media coverage impacts founder psyches and how it has evolved amidst an increased awareness around mental health. The two also discuss how external pressures are changing for younger generations of founders, as well as how society as a whole can truly tackle widespread mental health issues.

For access to the full transcription and the call audio, and for the opportunity to participate in future conference calls, become a member of Extra Crunch. Learn more and try it for free. 

Connie Loizos: Jerry, it’s a pleasure to be talking to you. We’ve been talking for many, many years. I’m afraid to say how many years…

Jerry Colonna: It’ll reveal how old we are.

Loizos: I know exactly. But I do remember you starting Flatiron, with Fred Wilson, many, many years ago and then going on to JP Morgan and I know that many of the listeners on the phone right now probably have traced your story because you are one of those characters of great interest in Silicon Valley. Can you talk a little bit about how you decided to leave venture capital and become a full-time coach?