At lunch I sat next to Giles McNamee, co-founder of McNamee Lawrence & Co, an investment banking firm based in Boston, London and San Francisco.
His tips included:
#1: Only work with people you like and trust. NEVER do a deal with people you don’t like or don’t trust.
#2: When you doing a VC-round, be prepared to give up 20–40% of the company. Given that, maximize the money you get. It’s always better to get $10 mio for 30% of your company than $1 mio.
#3: Hire a good lawyer for the paper work. Make sure the lawyer has done this before.
#4: There are at least 10 parameters to consider. The amount of money is only one parameter. Make sure you also think about all the other parameters. Be prepared for a complex negotiation.
#5: Angel/friends/fools money is a lot easier to raise than VC-money. If you need money quickly, do an angel round.
#6: Do your due diligence on your investors. Call the CEOs of their portfolio companies, call other references, find out how they work.
