Source: comment by Dharmesh Shah at http://venturehacks.com/articles/buying-a-car
1. Just like getting bank financing for a car, raise capital before you raise capital. Have some angel/seed money in before you talk to VCs.
2. “Drive It Off The Lot Price” = “What Percentage Of The Company Will I Have Once The Deal Closes and How Much Cash Do I Get”? This captures stuff like option pools, legal fees, etc.
3. Test Drive = Actually have some social time with your potential VC. If you wouldn’t want to have a drink or dinner with them, youl shouldn’t take their money.
4. Create Competition - But don’t call it an auction or a bidding (even though that’s actually what you’re trying to do). If you only have one potential investor, you don’t have a deal, you have desperation.
5. Go online - Just like watching this video is a good way to know the basics, read things like VentureHacks to learn more. [Yes, this is blatant pandering for a free coffee mug].
