“Be smarter than your lawyer and venture capitalist”: Two Helpful Books

Budding angels and non-executive directors are often asking whether there are any good books they should read to prepare them for an exciting and sometimes challenging journey. There is nothing better than hearing from practitioners with plenty of first-hand experience. That is where Brad Feld and his fellow authors Jason Mendelson and Mahendra Ramsinghani come in. They are veteran venture investors and entrepreneurs with more than 60 years in the industry between them. Unlike other investment professionals who guard any knowledge and experience jealously, Brad, Jason and Mahendra have written very powerful books that help investors, founders and pretty much anyone interested in the venture space to navigate the complex elements of the transaction. Although the authors have extensive bibliographies, the two particularly useful books are “Venture Deals” and “Startup Boards”.

“Venture Deals” is a comprehensive run through things to consider for, well, a venture deal. It starts with an overview of the softer factors, such as the “Players” and moves to the more technical aspects such as term sheets, letters of intent and the relative advantages of different funding types. Feld et alt explain the different concepts clearly and effortlessly. Most importantly, they add their experience of what works and what should be avoided. As a particular goody, the book includes a very generous appendix with sample term sheets, an extensive glossary and a long list of additional resources.

Although Feld and Mendelson write for US founders, most of the comments and tips apply to international audiences and different player groups as well. It helps the budding investor or NED to see the various issues from the founder’s perspective.

This is not a coffee table book nor a particularly good read for the beach. Although it can be read from cover to cover, the true value of the book reveals itself over time. It is an excellent reference tool that should never be too far out of reach when a snarky question comes up. How do you calculate the price per share with convertible notes again? What are the factors to consider when negotiating antidilution clauses? My copy is full of notes and post-its from being well-used over the years.

Like “Venture Deals”, “Startup Boards” is written for the founder and entrepreneur which does not reduce its relevance for budding Non-Execs, Advisors, etc. As the title indicates, Feld and Ramsinghani try to answer the question of how to “manage this beast called the board, which has many heads and even more opinions”. The authors focus on the soft aspects of a board, such as how to build a board, managing expectations and using the board’s social capital. They also provide checklists on what should be included in a Board Package and dos and don'ts of minute taking. It is a great read if you want to get a sense of what duties and challenges are expected of you as a board member. I find myself re-reading it every couple of months to make sure that I am not forgetting anything in the interaction with the companies that I am helping.

If you decide to buy any of these books, please consider using the links in the text. ProCervo is an Amazon Associate partner.

Are there any books or resources that you find particularly useful? Send us a message, we would love to hear from you!