Draper Triangle FAQs
Our FAQ section was created to help answer some of the more common questions entrepreneurs often have regarding the venture capital industry, in general, and our firm, in particular.
Where do I start?
Talk with everyone you know. This is a relationship business, and you will be surprised by who knows whom. Get feedback, and determine which venture capital firms focus on your... Continue reading »
Why are investors looking to invest anyway?
Bottom line . . . To make money. Investors give money to make money, not to accumulate ownership in companies.... Continue reading »
What are the stages of Venture Capital?
There are 5 stages of venture capital: Angel, Seed, Follow-on, Mezzanine, and Bridge Loans. The assumption is that valuation will increase through each stage and risk will decrease.... Continue reading »
In what stage does Draper Triangle invest?
We concentrate on Angel or Seed Stage rounds, as this is where we can make a difference to our portfolio companies, and where we can add the greatest value for... Continue reading »
What is a fair valuation?
A fair valuation balances company ownership with potential execution value. When the entrepreneurs and employees own too little of the company, there is no longer an incentive to work hard.... Continue reading »
Pre-money? Post-money? What are they?
Pre-money is the value of your company before the investment is made. Post-money is the value of the company after an investment is made. POST-MONEY = PRE-MONEY + INVESTMENT AMOUNT... Continue reading »
How much money should I ask for?
Look to get enough money to validate the next stage of your business. This is advantageous to both the investor, less money is at risk, and for the entrepreneur, there... Continue reading »
How should I calculate valuation?
The potential of the opportunity, the management team, and how much value the current investors bring combine to determine valuation.... Continue reading »
What is the key element in the value of my company?
The company is worth part of the potential of the company, but mostly, its value lies in what you have already achieved.... Continue reading »
What are the criteria for Draper Triangle investments?
In general, we look for high gross-margin businesses in large markets, not narrow niches and we place heavy emphasis on a great managment team.... Continue reading »
How much of the company should I expect to sell?
There is a range, depending on several factors. In general, the more stable the company, the less you need to give up in terms of equity.... Continue reading »
Will the VC take over the Board?
Venture capitalists will want to protect their investment, especially at the high risk, early stage of the company, but even so, majority board control will be rare.... Continue reading »
How much time do you spend with portfolio companies?
We all have start-up experience, and we give as much assistance as necessary to make the investment successful for both of us. We try to make sure you're a home... Continue reading »
What is the process to get an investment at Draper Triangle?
There's a process for everything and securing financing is no different. Generally, we follow an 8-step plan for making investments.... Continue reading »
Do you sign NDAs?
No. Signing an NDA provides too much risk to the investor, and truly, the disadvantages of an NDA outweigh the benefits to the company seeking funding.... Continue reading »
