Jonathan Friedman

Latest from Jonathan Friedman

  • The Erosion Of “Same Round, Same Price” Crunch Network

    The Erosion Of “Same Round, Same Price”

    It seems most founders believe investors asking for “extras” on the side are simply greedy and short-sighted. While it’s easy to criticize investors, I believe this behavior is driven in large part as a response to conditions founders have created in early stage investing. I believe two trends, when taken together, have eroded the “one round, one price” standard. Read More

  • What To Do If Your Lead Investor Asks For ESOP Crunch Network

    What To Do If Your Lead Investor Asks For ESOP

    As valuations continue to rise, early stage VCs are getting more “creative” with their deal structuring. In particular, I’ve seen a rise in requests for ESOP shares to be allocated to lead investors for their “value added services.” It’s common to give ESOP to advisors for their value add, so why not investors? Read More

  • Buy/Hold/Sell In Venture Capital Crunch Network

    Buy/Hold/Sell In Venture Capital

    A common rule of thumb among early stage VCs is to reserve 2–3X dollars for every $1 initially invested in a startup. This is in order to maintain ownership levels in selected portfolio companies and to support them through good times and bad. Obviously, it’s not optimal to invest the same amount per company. Given the often binary returns within VC portfolios, there are… Read More

  • Read This Before Meeting VCs For Pre-Pitch “Advice” Crunch Network

    Read This Before Meeting VCs For Pre-Pitch “Advice”

    Startups often ask VCs for pre-pitch meetings. These requests usually are positioned along the lines of, “We aren’t looking for money yet, just advice.” Of course, we all know this is just a nice way of getting your foot in the door for a soft pitch. And that’s ok; these meetings enable both sides to get acquainted before the real ask. However, when startups come… Read More

  • Three Reasons Your Term Sheet May Fall Through Crunch Network

    Three Reasons Your Term Sheet May Fall Through

    So you’ve made it past all the VC grilling and received a term sheet. Congratulations! But don’t celebrate just yet. Term sheets are non-binding, and even though they should signify a VC has conviction in investing in you and is ready to move towards closing, they fall through more often than most Founders may expect. Read More

  • Is Competition Really For Losers? Crunch Network

    Is Competition Really For Losers?

    While declaring “competition is for losers” has become fashionable among unicorn-chasing VCs, most founders still reject this line of thinking. They know there is a gray area, and that large markets with multiple similar companies can produce multiple success stories. Nevertheless, any startup that can’t explain why they will be 10x better versus their competition on a… Read More

  • The “Common Plus” Opportunity Crunch Network

    The “Common Plus” Opportunity

    It’s become increasingly common for early-stage entrepreneurs to “lead their own rounds” via the use of convertible notes. In cases where they set financing terms themselves, they often set a high valuation cap and sign initial angel investors onto those terms rather than waiting for VCs to join. While this sounds like it’s good for founders, it can actually harm… Read More

  • How Top Founders Juggle Term Sheets Crunch Network

    How Top Founders Juggle Term Sheets

    Breakout startups that are ready for “Fundraising Acceleration” often face the challenge of managing interest from multiple investors. Having been involved in a number of these startups first-hand as an early-stage VC, I’ve noticed a common pattern to how they manage to “juggle” investor interest that we can all learn from. Read More

  • The Key To Raising Your Seed Extension Round Crunch Network

    The Key To Raising Your Seed Extension Round

    Given the growth in seed funding driven by the combined forces of the “Micro-VC glut” and increasing activity by angel investors (often via crowd funding), it’s become increasingly common to meet so called “Seed Orphans” looking to raise seed extension rounds. These companies often have good teams that have achieved solid initial traction, but were asked by Round… Read More