50 Questions

Get Funded/50 Questions you should ask before raising venture capital – the journey from a series of blog posts to a book

By July 4, 2012 6 Comments

Regular readers will be well aware that through 2011 and into early 2012 Nicholas Lovell and I were writing a series of 50 blog posts designed to help entrepreneurs with the fundraising process, and that we intended to publish them in book format once we were finished.

This is how we described our aims for the series at the outset

Our hope is that the posts (and eventually the book) will be a good resource for anyone who is thinking about how to finance their company and who wants to understand more about the options, including venture capital.  The posts will assume very little, if any, prior knowledge and should be useful to everyone from newbies to the industry to those who have been around venture capital a fair bit and have a decent understanding, but are a bit hazy around the edges on some of the more detailed points e.g. ‘weighted average anti-dilution’ or ‘1x participating preference share’.

I think the posts deliver pretty well on this objective, but our challenge now is to make them into a book. Nicholas and I want it to be a book we can be proud of and that means doing more than putting the blog posts back to back with an introduction and some nice cover art. A good non-fiction should be interesting and take the reader on a journey, just like a novel.

The first thing we wanted to do was decide on a name, and so far we are liking “Get funded”, with a subtitle TBD.

The second (and much larger) challenge is finding a narrative structure for the book to hang the posts off. We are thinking that following the journey of a founding team from company formation through raising venture capital and then back to getting on with building his or her business could work well. We could split that journey into the following stages:

  1. Three friends sitting round a table in a pub thinking of business ideas, and then agreeing to start a company
  2. Having got started with £50k from their parents they set down to figuring out how to finance growth going forward – considering the pros and cons of VC
  3. Learning a little about raising venture capital it first sounds like the answer to everything, then begins to look like a daunting task
  4. They get to know a few people, maybe a VC or two, decide they understand what it means to raise venture capital and elect to go for it
  5. The process starts well, then stalls
  6. They change tack and then get offered terms following a piece of commercial success
  7. The deal almost dies during due diligence
  8. The round closes, champagne is drunk
  9. 8am the next morning they are back in the office delighted to be done with the fundraising, but daunted by the challenge of delivering the plan they have agreed with their new investors
  10. Fast forward twelve months and the founders are back in the same pub deciding to raise a Series B, but feeling older and wiser this time round

Our hope is that entrepreneurs at any stage in their fundraising process will be able to quickly find the section that corresponds to where they are and helps them figure out the best way forward. Raising venture capital can seem like a hard and complicated process and the journey from start to finish is often marked by quick shifts from elation do despair. VC is a very opaque industry and it is difficult for most entrepreneurs to know why VCs do and don’t take meetings and then decide to invest or not invest, and each little bit of progress or each little setback often assumes more significance than it deserves. Our aim is to make the whole process simple to understand and help reduce the emotional volatility entrepreneurs experience through the journey.

The next step is to match the posts we’ve written to this narrative structure and confirm that it works. So far I think it does, but this is new territory for me, so all thoughts welcome.