The investment landscape continues to morph. Floodgate, a “super-angel” fund started by Mike Maples, just raised a reported $75 million fund. Traditional angel investor Dave McClure just closed his reported $30 million fund, 500 Startups. On the other end of the spectrum, traditional venture firms are accelerating their early-stage investments with seed funds.
What this means for entrepreneurs is more options … and what it means for investors is the need to differentiate themselves in order to get in on the best deals.
From an entrepreneur’s standpoint, deal terms like valuation, dilution, liquidation preference and control rights continue to be important elements in getting a deal closed. But beyond that, we’d like to know what else is important to you when you’re doing a deal? For example:
- Brand name: The new angels, super-angels, incubators, and early-stage VCs are attracting a lot of attention and challenging large, established firms for the hottest startups. On the other hand, receiving an investment from a prestigious, top tier VC can open a lot of doors for a startup.
- Global expertise: Although the world is shrinking, it’s not necessarily easy doing business everywhere. Many U.S. startups looking to expand into emerging markets are looking for investors who have helped other portfolio companies break into international markets.
- Specialists in their space: As entrepreneurs remain nimble and opportunistic, they are also seeking investors who have a deep understanding of their competitors, customers, and technology. These investors can become real strategic assets in meeting new customers and gaining competitive insight.
What’s your opinion on raising funds in this current environment? We invite CEOs to participate in our “Calling all CEOs: 2010 Fundraising Survey.”
It’s just a few questions (and should take you less than five minutes). As a thank you for participating, you’ll receive a copy of the survey results as well as a chance to win an iPad!
Dorsey & Whitney is a corporate international law firm with a strong focus on technology-based startups and venture capital. Matt Bartus (firstname.lastname@example.org) and Ted Hollifield (email@example.com) are partners in the Palo Alto office. They specialize in corporate and securities law with an emphasis on representing emerging growth companies, venture capital financings, public equity and debt offerings, as well as mergers and acquisitions.