Emerging Enterprise Center Blog - Commentary and Analysis For Entrepreneurs and Startups

From time to time I have written about so-called standard provisions.  Standard provisions are often “standard” for a reason – that is they address concerns that people commonly have in a way that makes common sense in a particular context.  One problem is that sometimes parties assert that a particular provision is standard in a context that just isn’t the kind of place where it belongs. My current bug bear is the “drag – along” -- a standard feature of venture investments. Well the “drag” is standard in venture investments because VCs typically own a controlling interest in the companies... More

After Q1, I was wondering if the venture economy was back or if folks just thought so.  At the end of Q1 things seemed to be on a steady upward trend; now they seem to be sputtering. Well, the Q2 results have now been reported on by many sources, including the three law firms that publish data, Foley Hoag (my firm), Fenwick & West (a Silicon Valley based firm), and Cooley.  Unfortunately, I think Dave Pierson from my firm put it well in his analysis of New England based activity, “the environment for venture investing … has generally improved compared... More

Everyone thinks things in the venture world are looking up. Numbers of deals are up, valuations are up, terms are friendly. VCs and entrepreneurs are lining Winter Street and Sand Hill Road holding hands and signing kumbaya. Well, not quite. Foley Hoag LLP, Fenwick &West LLP, and Cooley LLP have now all published their reviews of venture financing transactions for Q1 of 2010, and, while there are some interesting differences, the tone is generally upbeat. Having said that, perspective is everything and sweeping statements about the health of the venture economy are l likely to be wrong if you don’t take all the available facts... More

 I had lunch today with an A list entrepreneur and we got around to the topic of whether or not the facts matter.   By the facts, I mean what is “market” in the venture investment world. This is a topic upon which I recently wrote a blog post pointing out that, at least in some cases, the facts don’t matter. I admit that I must have been in a funk, because I took the position that it probably does not really matter what is going on in the market. Basically, I said that if you are a repeat entrepreneur with a strong record... More

Should you jump on a plane to look for money on the west coast? Last Friday David Bell (from Fenwick & West), Sarah Reed (Charles River Ventures), Lizette Perez-Deisboeck (Battery Ventures) and I were the panel for a Dow Jones sponsored Webinar on the subject of "The Evolving Venture Term Sheet: What VCs & Execs Must Do To Secure the Best Deal." This Webinar was built around the deal statistics published by Fenwick (a west coast law firm) and Foley (an east coast law firm). As you might expect, the numbers appear to confirm that there are some identifiable differences... More

Yesterday I moderated a panel on the subject of the venture investment climate in 2009. The panelists were Axel Bichara of Atlas Venture and Austin Westerling of Charles River Ventures. The big picture take away from this event was that the investment climate is not as bad as advertised in the press.  In each case, Atlas and CRV have made a number of investments in the last year and continue to be actively looking for new investments. If I can generalize, their advice was (1) be prepared for a thorough diligence and, perhaps, a longer than normal process and (2) be realistic about... More