In this episode of the Venture Capital Podcast, hosts Jon Bradshaw and Peter Harris dive into one of the most critical yet often overlooked topics for startup founders: the questions you should be asking venture capitalists before taking their money. Drawing on their extensive experience, Jon and Peter discuss common pitfalls that founders face when negotiating deals, including the hidden terms in contracts that can come back to haunt a company years later.

The hosts stress the importance of doing deep due diligence on potential investors—not just their financial terms, but their character and how they handle failure. They emphasize asking tough questions about how a VC firm supports struggling portfolio companies and their philosophy on valuation and terms. Jon and Peter also reflect on the delicate balance founders must strike in pushing back while maintaining a constructive relationship.

Listeners will gain valuable insight into the realities of venture capital beyond the pitch room—the importance of understanding who is investing in your company, how VCs behave when things go wrong, and how to spot red flags early. This episode is an essential guide for founders preparing to raise capital and aiming to build a strong, lasting partnership with investors.

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In this episode of the Venture Capital Podcast, hosts Jon Bradshaw and Peter Harris delve into the complex world of valuations, exploring both the theoretical foundations and the practical realities faced by entrepreneurs and venture capitalists. Peter begins by discussing the fundamental principles of valuation, using the metaphor of a "Golden Goose" to illustrate how discounted cash flow models are used to estimate a company's worth based on future cash flows.

The conversation shifts to the venture capital landscape, where Peter notes that traditional valuation methods often don't apply due to the high-risk nature of early-stage startups. He emphasizes that while these models provide a theoretical framework, the actual process of valuation in venture capital is heavily influenced by negotiation and market dynamics.

Jon counters with a more pragmatic view, suggesting that valuations are often inflated and less relevant than other terms in a deal. He shares examples of companies being valued at significantly higher amounts than their true worth, highlighting how VCs may use these valuations to secure favorable terms.

Throughout the episode, the hosts discuss how the market has evolved, with valuations increasing dramatically over the past decade. They reflect on past deals, noting that what was once considered acceptable is now viewed as predatory, illustrating the shift in market norms and expectations.

The conversation concludes with insights into the challenges of raising capital, emphasizing that sophisticated entrepreneurs are better equipped to navigate complex deals and avoid unfavorable terms. Overall, this episode provides a nuanced exploration of valuations from both the VC and founder's perspective, offering valuable insights into the art and science of negotiating value in the venture capital world.

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Apple: https://podcasts.apple.com/us/podcast/venture-capital/id1575351789
Website: https://www.venturecapital.fm/

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In this episode of the Venture Capital Podcast, hosts Jon Bradshaw and Peter Harris tackle a crucial transition point for early-stage startups: making those first key hires. The discussion is sparked by a founder seeking advice on how to shift from simply building a product with a small team to building a structured company with employees.

Peter recounts his conversation with the founder and the resources he recommended: the books "Buy Back Your Time" and "Who Not How." The conversation emphasizes the importance of valuing a founder's time and creating mechanisms for delegation and self-management as the team grows. Jon and Peter then debate the founder's sentiment that "hiring is evil," considering the financial strain and potential pitfalls of premature scaling.

The hosts delve into actionable strategies for making smart hiring decisions. Jon shares his philosophy of hiring only when absolutely necessary and prioritizing individuals with whom you've previously worked. He also describes a method for quantifying the potential value of new hires by assessing the opportunity cost of current challenges. Peter discusses balancing founder-led efforts with building a functional team, including strategies for incentivizing tactical execution over strategic planning.

The episode covers tactics for identifying generalists versus specialists, the importance of clear communication and expectations, and alternative approaches like "hiring twice" to create a competitive environment. It also addresses the challenges of transitioning from founder-led sales to a structured sales organization, emphasizing the importance of finding individuals who can perform at 70% of the founder's level.

Overall, this episode provides founders with valuable insights and practical advice on navigating the complexities of early-stage hiring, offering guidance on building a strong team while avoiding common pitfalls.

Follow the Podcast
Instagram: https://www.instagram.com/venturecapitalfm/
Twitter: https://twitter.com/vcpodcastfm
LinkedIn: https://www.linkedin.com/company/venturecapitalfm/
Spotify: https://open.spotify.com/show/7BQimY8NJ6cr617lqtRr7N?si=ftylo2qHQiCgmT9dfloD_g&nd=1&dlsi=7b868f1b72094351
Apple: https://podcasts.apple.com/us/podcast/venture-capital/id1575351789
Website: https://www.venturecapital.fm/

Follow Jon Bradshaw

LinkedIn: https://www.linkedin.com/in/mrbradshaw/

Instagram: https://www.instagram.com/mrjonbradshaw/
Twitter: https://twitter.com/mrjonbradshaw

Follow Peter Harris
LinkedIn: https://www.linkedin.com/in/peterharris1

Twitter: https://twitter.com/thevcstudent

Instagram: https://instagram.com/shodanpete

Youtube: https://www.youtube.com/@peterharris2812