Term Sheet 2011 2: Fill & Download for Free

In terms of reading and learning, there is a ton of accumulated wisdom available on the Web for free thanks to he efforts of many veteran entrepreneurs, angels, VCs, lawyers, CPAs, and others.Update: With the introduction of Quora Boards, we created Term Sheet, a board focusing on these subjects that aggregates links to much of the best content from both Quora and other sites: http://quora.com/termsheet .I'll reproduce my "Top 15" list of favorites here, which you can also find with related materials at http://bll.la/9n . In my case, the focus is heavily on early-stage startups in consumer Web, mobile apps, social media, digital media and similar businesses that intend to seek angel or VC funding at some point in their lifecycle:Survey results regarding current state of the VC funding market (WSJ) – http://bll.la/4FHow To Pick A Co-Founder, by Naval Ravikant (Venture Tips and Hacks) – http://bll.la/4ICompStudy 2008 Report on Equity and Cash Compensation at Technology Startups – http://bll.la/4JHow to Work with Lawyers at a Startup (Mark Suster) - http://bll.la/9MThe Founders’ Pie Calculator (Frank Demmler) - http://bll.la/9jWhen and Where to Incorporate, Corporation vs. LLC, etc. (Yoichiro Taku) ("Yokum") - http://bll.la/4KTypes of Angel Financing (Scott Edward Walker) - http://bll.la/4eSeed Funding Best Practices (Mark MacLeod) (“StartupCFO”) – http://bll.la/4ETerm Sheet Series (Brad Feld) – http://bll.la/9mTerm Sheet Generator for Venture Financing (Wilson Sonsini Goodrich & Rosati) – http://bll.la/9Y, plus my commentary at http://bll.la/55Everything You Ever Wanted To Know About Advisors, by Babak Nivi (Venture Tips and Hacks) – http://bll.la/4h and http://bll.la/4iHow To Pump Up Your VC Valuation (Matthew Bartus) – http://bll.la/9K“Series Seed” Financing Documents (Ted Wang) - http://bll.la/53, plus my commentary at http://bll.la/55What are some ways to prevent and/or deal with legal issues that arise from actions of users on user generated content websites? by yours truly, right here on Quora (product), which I've expanded into a blog post with more background at http://bll.la/Cc ; andEmployment Law Traps for Technology and Media Startups (me again, at Biznik) – http://bll.la/3nAs of Sept. 2011, I've begun blogging weekly at Gust (company), along with many others including David S. Rose, Tim Berry, Bill Payne, Bob Rice, Ilana Grossman, and more. This is rapidly becoming a valuable resource for early stage entrepreneurs and angel investors. Check it out at http://www.gust.com/angel-investing/startup-blogs/ .

Here's some background on how Shopify started from their CEO Tobias Lütke:"In 2004, after immigrating to Canada I decided to start a Snowboarding and Winter sports gear store, with my friend Scott Lake. The idea of starting my own business came pretty naturally. During an apprenticeship in Germany I started a company with some friends to create a call center ticketing software. Naturally this fizzled out completely, but by then I had caught the bug. That, and I don’t do very well working for others.Initially, I assumed that setting up the online store was going to be the smallest issue in this venue. To make a long story short, after trying a series of existing online store software packages I got so disgusted with the quality of the whole lot, that I wanted to do something about it just to spite them.After a lot of pizza and late night coding, we re-launched Snowdevil in late 2004. This time it was powered by our own store system that I built in Ruby on Rails. We continued to sell our products for the rest of the season and then pivoted it to become a software company. The Shopify software is now exactly what I had hoped to find for myself in 2004. It continues to develop and improve all the time, making it better than I could have ever imagined. What used to take months in 2004, can now be done in about 20 minutes on Shopify." [1]They raised a $7M Series A in late 2010, followed by a $15M Series B in late 2011. [2] Tobias explains why they raised funding here:"Traditionally most businesses raise outside capital to pay their staff. Employees tend to leave if there isn’t enough money to pay salaries. Obviously, Shopify doesn’t have this problem. We have been profitable for a few years now.For us, we raised the money because we are too impatient. We run a SaaS business and it’s easy to accelerate growth through customer acquisition once your business model is proven.Raising the money was fairly straightforward because we already had a proven business model. Considering the wealth of data and history with our business, there really wasn’t much hesitation by the investors to provide us with a term sheet.Due diligence was just as much a pain in the ass as everyone says it is. In our case it lasted longer then expected, as a result of cross border issues. Luckily, the recent change in Section 116 of the Canadian Income Tax Act meant that we could remain a Canadian company without having to setup an American shell company. What a relief." [1][1] Top 5 Keys to Shopify’s Success - an Interview with Tobias Lutke[2] Shopify | CrunchBase Profile

I want to offer an alternative view to Travis Kalanick.Thesis: The image that Travis Kalanick has in the media is largely exaggerated and manipulated to paint him in a certain negative and immature light. He is actually probably the grittiest founder in SV today.Caveat: I have never met the guy. All of the things I say are from primary sources I gathered from around the internet, some from Travis' talks, and others from people's writings. I'm expressing my own opinion, no one is paying me anything, and you should follow the links to do your own research.Lets start with some of the bad press. There's a lot, but lets just look closely at one particular famous example:“We call that Boob-er:” The four most awful things Travis Kalanick said in his GQ profile: http://pando.com/2014/02/27/we-call-that-boob-er-the-four-most-awful-things-travis-kalanick-said-in-his-gq-profile/I'm pretty sure that you've all read this, and if you didn't read the entire thing (who has the time to read anymore?) at least you saw the headline and just rolled your eyes: "Ugh. Another stupid thing from Travis"Whats really interesting, is that, as far as I and Google Search can tell, there was no GQ profile on Travis. Yep. What there was instead, which the Pando blog references, is a post that Mickey Rapkin wrote called Uber Cab Confessions- which involved him doing the whole undercover reporting angle, signing up to be a UberX driver, and recounting some stories of drunken partiers n his back seat.Check it yourself: http://www.gq.com/news-politics/newsmakers/201403/uber-cab-confessions?currentPage=1What's strange though, is that in between lines about his uncouth customers"Just for the record, I have been waiting in this brat's driveway for fifteen minutes while he (I'm just guessing here) stared at himself in the mirror and (again, just guessing here) debated exactly how many rope bracelets still qualifies as casual"Mickey Rapkin pens some authoritative reflections on the nature and personality of Uber CEO Travis -Uber was co-founded by Travis Kalanick, a bro-y alpha nerd who's been coding since he was in sixth grade ... Not to make assumptions, but Kalanick probably wasn't the first kid in his class to lose his virginity. But the way he talks now—which is large—he's surely making up for lost time. When I tease him about his skyrocketing desirability, he deflects with a wisecrack about women on demand: “Yeah, we call that Boob-er.”Wait, what? When did Mickey Rapkin, undercover UberX driver, interview Kalanick? I thought this was a post about voyeurism.The craziest thing, though, about this so called "GQ profile", is that if you do a Ctrl+F on both pages of the article, and look for the word “Kalanick” — it comes up precisely 6 times, and 5 of those are on the second page. There are 3 quotes from him, 1 mention and 1 photo caption. In depth profile indeed.Now when Pando wrote about the GQ article, it called out a few quotes, like"Anecdotally, though, there seemed to be something vaguely, well, douchey about the way people talked about Uber. Last summer, the company experimented with helicopter rides on demand to the Hamptons; it was a stunt, but one that seemed to speak volumes about its ambitions. "but not"At the same time, uberX is oddly egalitarian: It offers rides for the people, bythe people. What's more democratic—and capitalistic—than giving a lift to a stranger for a small fee?" - which immediately followed on the next proceeding paragraph. Hmm.Pando Daily's favorite recap from the GQ article though, was the "boober" comment heard around the world.When I tease him about his skyrocketing desirability, he deflects with a wisecrack about women on demand: “Yeah, we call that Boob-er.”Overnight, it seemed like every major news outlet went to town on it:- http://recode.net/2014/11/20/seth-meyers-dubs-travis-kalanick-the-boober-guy/- http://www.latimes.com/local/abcarian/la-me-ra-self-inflicted-wounds-of-uber-20141119-column.html#page=1- http://www.smashcompany.com/business/uber-ceo-travis-kalanick-is-a-danger-to-women- http://www.washingtonpost.com/blogs/innovations/wp/2014/11/20/ubers-legacy-hangs-in-the-balance-digital-robber-baron-or-respectable-innovator/- http://www.thebolditalic.com/articles/6142-should-all-women-uninstall-uber-Don't just blindly accept what i just told you. Fact-check it yourself: http://pando.com/2014/02/27/we-call-that-boob-er-the-four-most-awful-things-travis-kalanick-said-in-his-gq-profile/So who exactly is Travis? Instead of relying on second hand journalism to tell us, why not go to the source?Failcon is a conference designed to celebrate failure. Its an amazing place where speakers are open about their experiences. Travis gave a speech there in 2011 - 'submitting [his] application for unluckiest entrepreneur of the year'.If you watch this talk from beginning to end, you will realize that he had been fighting for his life (as an entrepreneur) for most of his life.At his first company, Scour - a P2P file sharing app, he- got a term sheet from media mogul Mike Ovitz, founder of CAA, former president of Disney, which had a no-shop clause, meaning he couldn't take money from other people- had the company run out of money - because Ovitz wanted the company to run out, so that he could get a larger piece of the company- was sued by Ovitz the company for trying to raise from other people, and then publish the story on the WSJ - scaring off all possible investment- sued again by 33 of the largest media companies in the world (a-la Napster) - for sharing entertainment media on the internet without paying- filed for Ch 11 Bankruptcy to avoid paying the 250 billion suit- had the company sold in courtIn his second company - born from the ashes of the first - Red Swoosh, he had:- his co-founder stab him in the back - and send a private email to Sony VC saying - we're done, do you want to acquire me and the engineers?- weathered dotcom bust. biggest competitor - Akamai - went from 5 billion market cap to 160 million.- Sept 2, 2001 - ran out of money - had 6 engineers, worked 3 months without pay. also owed the IRS 100K in non-withheld income tax- mid 2003 - had a deal with Microsoft - that ultimately was a low-ball - a 1.2M acquisition offer, that after all the loans 900k were paid off, left him with 300,000- ran out of money, had a last minute rescue from Mark Cuban for 1M- was at Davos, and had his only remaining engineer quit with a tweet- pleaded engineering work from his engineer, from 10 pm onwards, Tuesdays and Thursdays- ran out of money, had to do a 4-way deal with investors- finally sold to Akamai for 23 M, 6 years after starting the companySo the road to entrepreneurship has been pretty rocky for Travis to say the least. During his period, he said, he became really good at negotiating from a “position of weakness” — and undoubtably also internalized the values of hustle and scrappiness.I don't want to dabble in conspiracy theories, but it is an interesting data point that many of the people he first clashed with, including Mike Ovitz, were from Hollywood's media business. Ovitz lawsuit of Scour made it into the WSJ a few days, and nuked Scour's fundraising.However, what is apparent to me, is that the Travis Kalanick that you see on the stage at Techcrunch, making fun of himself:"You know what, my comms team wishes that i took media training, have you seen some of the things I say?"and at failcon, recounting his failures (“i was a failure pioneer”), is a rather different Travis then the bro-ish, arrogant, misogynistic Travis that you seem to hear so much about in the press these days.tl;dr. Don't believe everything you read in the news. Go find the sources yourself, and make your own judgement.