I finished this book halfway through my holiday last week. Yep, no Shades of Grey, David Baldacci or Lee Childs for me! It was a great read. I must profess to know the author a little bit as Quester, for whom Simon Acland used to work, and one of the investors in Sift, (http://www.sift.com) my previous business.
Having read the book, I connected with Simon on LinkedIn, commenting that I’d wished he’d written it before we’d taken VC investment in Sift. Clearly he was unable to do so, explaining that he hoped at those times they’d provided much of the information to their investment companies. And yes, they did. They provided everything we needed to know about drag along, tag along, premium retrieval etc, but what they did not, and obviously were never going to provide was the insider view that only a former venture capitalist can provide.
It was these insights to the mindset of a VC that I think would be the most useful to a business thinking about investment. The second chapter, Understanding the Venture Capital Beasts, is the best one for improving your knowledge of just how a venture capital firm works. For example, the importance VCs put on the raising of a follow on round, plus exactly how they make their money from the Limited Partners who actually invest in their funds.
Chapter 4 Valuations and Tricks of the Trade is a very, very good précis of the various kinds of valuations mechanisms over and above simple terminology such as pre-money and post-money.
Chapters 7 to 10 cover various operational topics such as board meetings, managing expectations, remuneration and management; all important topics in their own right and covered in ample detail. In short, it’s really helpful for someone who’s never had outside investors in their business understand just how life will change when they do.
At 250 pages and just £16.14 (via Amazon) the book is a cheap, fast, easy read and highly recommended for anyone looking to better understand how VCs, in particular, work.