Comments on Tom Pinckney: How to figure out what those VC terms mean for you...

This is a great tool. For a similar tool in XLS, s...

2010-02-01T13:44:25.011-05:00

This is a great tool. For a similar tool in XLS, see this page highlighting Andy Metrick's work on understanding the actual value of equity and the impact of structure under different exit scenarios.

http://www.som.yale.edu/faculty/am859/textbook.htm

I took his class, and the book actually gives a good overview of the VC industry and glossary of terms -- I wish I had read the first couple chapters before I raised money for my start-up effort.

-@phineasb

Thanks Simeon!

2010-01-31T09:11:35.759-05:00

Thanks Simeon!

Hey, Tom, this is a cool project and good educatio...

2010-01-30T22:56:00.252-05:00

Hey, Tom, this is a cool project and good educational tool.

The reality of financings and M&A, unfortunately, is that there are too many variations. For example, most entrepreneurs don't know that there is no single definition of broad-based anti-dilution protection. And the seniority of preferred isn't necessarily last money wins. And that you have to account for vesting and working capital and escrows on exit. And low value exits include management carve-outs that don't necessarily go to all common holders. The list goes on and on.

The real problem is less the calculation given all this information but capturing the information in the first place and the total amount of code (most of it really simple) that is required to handle the various pieces.

Still, there should be a better way than Excel. ;-) Good luck with this.

I guess being a computer guy myself this turned ou...

2010-01-30T18:55:53.567-05:00

I guess being a computer guy myself this turned out to be the only way to really understand it myself. There's nothing like trying to write code for something to force you to understand it.

Ha! You have found the only way to explain these t...

2010-01-30T18:53:31.747-05:00

Ha! You have found the only way to explain these things to programmers. Follow the Python code.

Hey Mark, make sure you understand preferences be...

2010-01-30T15:41:06.222-05:00

Hey Mark, make sure you understand preferences before taking money from anyone.

Great way to learn the shares/ownership system Tom...

2010-01-30T14:26:14.671-05:00

Great way to learn the shares/ownership system Tom.

Hope to one day have this stuff down down the road, but all I can think about now is market traction.

Appreciate the heads up Tom.