Building Wealth through Venture Capital: A Practical Guide for Investors and the Entrepreneurs They Fund

PRAISE FOR BUILDING WEALTH THROUGH VENTURE CAPITAL

"Len Batterson was a founding investor in AOL, and helped make the Internet part of everyday life. Building Wealth Through Venture Capital is essential reading for budding entrepreneurs seeking venture capital, and for investors who want to lead in the Internet′s Third Wave."
Steve Case, Co–Founder, AOL, Chairman and CEO, Revolution

"Len Batterson is a battle–tested and victorious participant and strategist in venture capital. I have worked with him for many years and in many deals. In Building Wealth Through Venture Capital, Batterson and Freeman cover the field of venture capital for entrepreneurs seeking to raise capital and investors looking to deploy it. If this is you, read this book."
Casey Cowell, Co–Founder and former Chairman and CEO, U. S. Robotics

"Len Batterson is one of a very select group who has the experience to really understand venture capital. That makes this book a must–read and a surprisingly easy–to–understand one too for anyone thinking about investing in venture capital or looking to VCs for funding support. Because he has been a part of many major shifts in the venture capital industry and the ups and downs of generations of venture–backed companies, Len has the perspective needed to bring distinct insights to his analysis of the capital engine that drives an ever–growing portion of innovation and wealth creation."
Chris Gladwin, Founder and former CEO, Cleversafe

"Straightforward, practical, and informative. I wish I had read this book before I made my VC investments!"
James M. Kilts, Former Chairman and CEO, The Gillette Company

Preface vii

Introduction xi

Part I Understanding the Major Players 1

Chapter 1 The Venture Capitalist: Funder of Dreams 3

Chapter 2 The Entrepreneur: His Mind and His "Cultivation" 7

Part II For the Investor: A Guide to Realizing Big Returns 23

Chapter 3 Why Should You Invest in Venture Capital? 25

Chapter 4 How to Find the Right Venture Capital Firm 35

Chapter 5 Venture Capital Investment versus "Buffett s Real Rules" of Investment 51

Chapter 6 Avoid the Seduction of Unicorns: Get in Early 63

Chapter 7 Finding the Highest Quality Investments at the Right Price 73

Part III For the Entrepreneur: A Guide to the Money Search and All That Follows 87

Chapter 8 The Mating Dance: Prospecting for a Venture Capital Investor 89

Chapter 9 The Final Exam: Due Diligence 101

Chapter 10 Finding Your Deal–Doing Lawyer 115

Chapter 11 Financing Has Arrived and "You re Married" . . . Now What? 123

Chapter 12 The Last Dance: A Successful Exit 133

Chapter 13 Interview with a Successful Entrepreneur 149

Part IV Looking Ahead: What s to Come 169

Chapter 14 The Foreseeable Future 171

Acknowledgments 187

About the Authors 189

Index 191

LEONARD A. BATTERSON is Founder, Chairman, and CEO of VCapital, an online venture capital portal bringing institutional quality investment management to individuals. A pioneer in venture capital investment for individuals, his previous funds have generated gross returns averaging 28%/year.

KENNETH M. FREEMAN, an adviser to VCapital, brings the practical perspective of a traditional corporate executive and individual investor.