If the playlist is shown at the bottom of the YouTube screen, just hit the red bottom-left icon.

There are 5 videos comprising the training (YouTube limits the duration of the videos). In total, there is just more than 30 minutes of videos as part of the VCIC training. In addition, we have a VCHub product orientation video separate from these 5 videos.

First, there’s the Class F stock documents created by Wilson Sonsini and hosted on TheFunded Founder Institute.  This is by far the most entrepreneur friendly of the three example term sheets.

Second, the Y Combinator hosted Series AA documents, available here. These are representative of Angel funding documents, and were created by Wilson Sonsini.

Third, the NVCA hosted documents, available here. These are more representative of Venture Capitalists, as you may expect.

Last, but certainly not the least, is Wilson Sonsini again (seeing a pattern?) providing an exceptional tool to automatically generate term sheets after answering a questionnaire.

1. Reading the business plans
2. Listening to the entrepreneur pitches (15 minutes)
3. Performing Due Diligence (15 minutes)
4. Creating the deliverables (term sheet and executive summary)
5. Performing the negotiation (18 minutes, 7 minutes Q&A with judges afterwards)

#2, #3, and #5 are shown in even tighter time constraints on BBC’s Dragon’s Den TV program. This show (available on BBC America) has Dragons (the VCs) hearing entrepreneur pitches, asking some due diligence questions, and then making decisions to invest or not. Absolutely fantastic for a variety of reasons, but most importantly a great way to get some perspective for VCIC participants.

1. VC Limited Partners (LPs) contractually obligate the VC General Partners (GPs) to avoid any pass through tax liabilities that may result in an investment into a portfolio company that wasn’t a C-Corp.
2. Even if the company was a non pass-through tax entity (like an LLC with an election to be treated as a non pass-through entity), the governance of the company would be non-standard as compared to a C-Corporation. VCs focus on C-Corps, and even though it is possible to invest in an entity like an LLC, they don’t to avoid complexity.
3. Lastly, if the company was an S-Corp, the company would immediately be converted to a C-Corp when a VC invests, as the fund is a non-person. See this post for more information.

Manage the entrepreneur’s responses

Your time will quickly run out if the entrepreneur begins a long winded response.  Set expectations at the beginning of the meeting that you may have to interrupt.  Nothing is worse then to have 5 minutes of time elapse before either the entrepreneur finishes their response or someone finally interrupts.  Just remember, be polite.

Prioritize your questions

Each team member that asks questions should have their list of questions prioritized.  There are some questions that are simply more important than others, especially with the change to the negotiation format for the competition.  A few examples:

• “What are your expectations for valuation?”  Other teams may ask, and then the judges know the expected valuation for the entrepreneur.  If you offer a term sheet with a higher pre-money valuation than needed you’re starting off on the wrong foot even before the negotiation.
• “What milestones will this round allow you to reach?”  In an investment into a startup the use of the funds should be to achieve a higher valuation in the least amount of time.  Identifying the key milestones is a must for any entrepreneur, therefore it is a good idea to ask them.
• “How much total capital is needed to achieve an exit?”  Most likely, a single round will not sustain a company until exit.  Hopefully the entrepreneur has based their expected total capital required off of a financial model with meaningful assumptions.
• “What potential exits do you see for the company, and when?”  It is best to understand the expectations of the entrepreneur with regards to exit, especially if they have a few potential acquirers in mind. See comparables.