Our Guides are never “finished.” We update our content just like software. And like software roadmaps, we are transparent about what we are working on. These release notes detail our progress from one draft to the next, as we build a Guide from the early-release drafts (0.1, 0.2, 0.3, and so on) through the first published edition (1.0), and all the subsequent editions of a published Guide (1.1, 1.2, 1.3, and so on). Release notes for the periodic updates that follow 1.0 will chronicle important changes or additions to a Guide, including new content based on any news in the field or topic, new insights or best practices, responses to reader questions, and more.
If you’re interested in contributing to this or any of our other Guides, please take a look at the details on our contributor network and our list of open roles.
Planned additions to the Guide include:
- Waterfall diagrams modeling liquidation preference scenarios
- In-line examples of term sheet terms taken from real term sheets
- More advanced venture capital finance scenarios
- How Series A differs from seed
December 18, 2019
We’ve been hard at work since edition 1.0’s release to improve one of the key elements of this Guide: its definitions. Today we are pleased to bring you six new definitions of terms you might find in a convertible instrument or venture capital term sheet, plus updates to 51 existing definitions. We made these updates to provide greater clarity and offer more detailed information where we felt it would be useful to our readers.
The six new term sheet definitions are: 1. Assignment 2. Founders' activities 3. Indemnification 4. IPO participation rights 5. Management rights letter 6. Most favored nation
The 51 revised definitions appear throughout the Guide, but they are most concentrated in Part I: Understanding the Landscape, Part II: Financing, and Part IV: Term Sheets.
|Guide Section||Revised Definitions|
|Understanding Venture Capital||Accelerator; angel investors; down round; entrepreneur; flat round; founder; fundraising; generalist firms; initial public offering; limited partnership agreements; merger or acquisition event; startup; super angel; thematic firms; thesis-driven firms; up round; venture capital; venture capitalists; venture capital firm; venture capital fund|
|Assessing Whether to Raise||Board member; board of directors; board seat; inside director; outside director|
|Determining When to Raise||Parallel fundraising; serial fundraising|
|Determining How Much to Raise||Common stock; option pool; preferred stock; valuation|
|Choosing a Financing Structure||Capped participation; conversion rights; convertible equity; convertible note; discount; full participation; interest; KISS; liquidation preference; liquidation preference overhang; liquidation preference stack; participating preferred; participation rights; safe; shadow preferred stock; valuation cap|
|Creating a Target List of Investors||Relationship management|
|Term Sheets: Essential Terms||Accelerated vesting; board observer; double trigger; information rights; pro rata rights; single trigger; super pro rata rights|
|Term Sheets: Other Terms||Anti-dilution; co-sale agreement; dividend; drag-along agreements; full ratchet anti-dilution; no-shop agreement; pay-to-play; redemption rights; registration rights; restrictions on sales; right of first refusal; weighted average anti-dilution|
|Appendix B: Returns, Management Fees, Carried Interest||Management fees; recycling|
August 1, 2019
Two years in the making, this Guide is the product of the efforts of more than fifty writers, founders, lawyers, investors, and others in the venture capital and startup universe. We pulled in lawyers who worked at the early stages of Uber and Airbnb, investors who’ve been active for decades, and critics of venture capital to create a comprehensive, practical Guide you can put to use today.
Updates since draft 0.7 include:
- Significant rework of Choosing a Financing Structure and Term Sheets.
- New infographics and data visualizations
- A thorough walk-through of the pitching process, from designing your deck, to practicing your presentation, to what to do when you’re in a room with investors.
Draft Edition 0.7
July 5, 2019
As we prepare to release the full Edition 1.0 of the Guide, we’ve put a bunch of elbow grease into making it really shine. This release now provides readers with:
- Polished, informative legend icons
- Further legal review of the content on term sheets and financing structures.
- Parts (as in, Part I, Part II, Part III, Part IV), which help consolidate related content within a Guide and provide more structure and guidance through the material.
- Copyediting to clean up distracting inconsistencies in formatting and syntax, and editorial work focusing on transitions to help guide readers from section to section.
Draft Edition 0.6
May 16, 2019
This update, which focused largely on editorial polish, was a joint release with a host of new product features, including:
We review and link to a significant amount of information online and offline. There are some resources we think you might want to (or really ought to) read, and we link to those resources from the text so you can access them with ease. Other material is simple citation, and for those we now have footnotes. Footnotes will let you know where we got certain data, quotations, or other research. They make finding sources easier, and your reading experience less cluttered. Hover over our footnote symbol* in the text if you want to know the citation, and follow the link from there to visit any source material.
Editor’s notes let you know where we plan to add, update, or improve a section.
We’re always looking for contributions from our community—now we can let you know when your input might be needed:
(For more detail on contributing to Holloway, see our post on the Holloway Contributor Network.)
Draft Edition 0.5
April 22, 2019
This was a big update, enough so that we wrote our first public Guide release notes for it. A few highlights include:
- New sections, including “Meeting with investors,” “How VCs can control your company,” and primers on ownership and equity.
- Improvements to the sections on term sheets and early-stage financing strategies.
- Incorporation of expert review from Draft 0.4, including Brad Feld, Michael Brown, Eugene Wan, Lindsay Knight, Craig Montuori, Alexander Graebe, Aaron Schwartz, Santosh Sankar, Lindsay Knight, Tyler Tringas, Eric Friedman, Amit Mukherjee, Danielle Morrill, Praveen Boda, Christina Li, Shiju Thomas, Travis Hedge, Kevin Lee, and more.
Draft Edition 0.4
February 15, 2019
This draft focused on updating and refining our glossary.
Draft Edition 0.3
January 16, 2019
Early readers now have access to the Guide, with a more thorough table of contents, significantly more writing filled in across almost every section, and the first round of expert review and feedback incorporated.
You can now view some of the more number-heavy info in a small set of interactive charts and infographics, like this one:
Draft Edition 0.2
December 12, 2018
This release brought a much greater level of structure and organization to the Guide (earlier in the year, Holloway hired its second employee and first editor, Rachel Jepsen!).
We added sections on Networking, Assessing Whether to Raise, and Bias and Discrimination in Fundraising.
The first of what would become almost a hundred formally defined terms, like this:
- This draft also introduced the Legend, which we use in all Holloway Guides (though it has improved in many ways since this first iteration):
Draft Edition 0.1
August 9, 2018
We published this initial draft of the Guide to Raising Venture Capital just over a year after lead author Andy Sparks committed his first content on the project. It’s still an internal draft; we hadn’t invited any early readers yet. It included a rough outline of the entire Guide:
- Picking Your Timing
- Develop a Financing Hypothesis
- Choose a Financing Structure
- Sourcing Investors
- Reaching Out to Investors
- Negotiating a Term Sheet
- Challenges, Setbacks, and Mistakes
- How Venture Capital Firms Operate
- Alternatives to Venture Capital
Many sections are simply long lists of books, blogs, and other resources, all of which we will eventually read, compare, and integrate into the Guide.