The Brandon White Show (EDGE for peak performance)

Venture Capital Funding and Investment Terms with Nareg Essaghoolian from Decrypted Legal & Consulting

April 20, 2023 Brandon White, Nareg Essaghoolian Season 3 Episode 262
Venture Capital Funding and Investment Terms with Nareg Essaghoolian from Decrypted Legal & Consulting
The Brandon White Show (EDGE for peak performance)
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The Brandon White Show (EDGE for peak performance)
Venture Capital Funding and Investment Terms with Nareg Essaghoolian from Decrypted Legal & Consulting
Apr 20, 2023 Season 3 Episode 262
Brandon White, Nareg Essaghoolian

We explore the world of startup funding and venture capital. Nareg shares insights on the use of safe notes, valuation caps, and discounts in pre-seed rounds.

We discuss the importance of having a product or service with positive revenue when seeking institutional investment and the challenges faced by first-time founders in securing funding.

We also dive into how the investor market has changed over the last few years and give advice to anyone looking to raise money from investors.

About Nareg Essaghoolian
Nareg Essaghoolian is the co-founder of Decrypted Legal & Consulting.  He represents startups from day one at formation through their venture capital financings and exit.

Prior to Decrypted, he spent several years at Cooley in Palo Alto, CA, one of the most prominent firms in the industry.

He is now back in Los Angeles where he is born and raised working on disrupting the legal industry by being more transparent with pricing and services.

EPISODE LINKS

EPISODE TIME STAMPS

[00:00:47] - Startup legal expertise from UCLA
[00:02:20] - VCs don't do follow-on investments?
[00:03:20] - Smart decision, reduced risk, 10x return.
[00:03:46] - "Investors don't follow: Crazy thought."
[00:04:29] - Sequoia loses trust, no follow-on investment.
[00:05:16] - "Ten times return on investment"
[00:05:55] - Y Combinator: Accelerate, Invest, Return.
[00:06:47] - Angel investors not investing in Series B, C.
[00:07:44] - Tech, web three, down rounds.
[00:08:35] - "Protective terms more prevalent than pay-to-play."
[00:09:31] - "Understand cap table terms: Liquidation Preference"
[00:10:06] - Investors get preferential treatment.
[00:11:01] - Double-dipping liquidation preference.
[00:11:34] - Negotiating Leverage for Investors
[00:12:25] - Investor gets 20% upside.
[00:12:58] - Participating Preferred: 18M Shared
[00:13:47] - "Accumulating dividends of 6% annually."
[00:14:30] - Investors leveraging market, waiting.
[00:15:23] - "Maximize returns in venture capital."
[00:15:54] - Betting on ten, hard model.
[00:16:37] - Equity over loan for higher returns.

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podcast for entrepreneurs

Show Notes

We explore the world of startup funding and venture capital. Nareg shares insights on the use of safe notes, valuation caps, and discounts in pre-seed rounds.

We discuss the importance of having a product or service with positive revenue when seeking institutional investment and the challenges faced by first-time founders in securing funding.

We also dive into how the investor market has changed over the last few years and give advice to anyone looking to raise money from investors.

About Nareg Essaghoolian
Nareg Essaghoolian is the co-founder of Decrypted Legal & Consulting.  He represents startups from day one at formation through their venture capital financings and exit.

Prior to Decrypted, he spent several years at Cooley in Palo Alto, CA, one of the most prominent firms in the industry.

He is now back in Los Angeles where he is born and raised working on disrupting the legal industry by being more transparent with pricing and services.

EPISODE LINKS

EPISODE TIME STAMPS

[00:00:47] - Startup legal expertise from UCLA
[00:02:20] - VCs don't do follow-on investments?
[00:03:20] - Smart decision, reduced risk, 10x return.
[00:03:46] - "Investors don't follow: Crazy thought."
[00:04:29] - Sequoia loses trust, no follow-on investment.
[00:05:16] - "Ten times return on investment"
[00:05:55] - Y Combinator: Accelerate, Invest, Return.
[00:06:47] - Angel investors not investing in Series B, C.
[00:07:44] - Tech, web three, down rounds.
[00:08:35] - "Protective terms more prevalent than pay-to-play."
[00:09:31] - "Understand cap table terms: Liquidation Preference"
[00:10:06] - Investors get preferential treatment.
[00:11:01] - Double-dipping liquidation preference.
[00:11:34] - Negotiating Leverage for Investors
[00:12:25] - Investor gets 20% upside.
[00:12:58] - Participating Preferred: 18M Shared
[00:13:47] - "Accumulating dividends of 6% annually."
[00:14:30] - Investors leveraging market, waiting.
[00:15:23] - "Maximize returns in venture capital."
[00:15:54] - Betting on ten, hard model.
[00:16:37] - Equity over loan for higher returns.

CONNECT WITH US


OTHER GREAT PODCASTS ON THE THE BEST PODCASTS NETWORK


podcast for entrepreneurs