Dog-Eared: VC Due Diligence, Learning from's Exit, SAFEs & Convertible Notes

Welcome to Dog-Eared by Aleberry where we give you peek into our inbox! We're weeding out the Bullsh*t from the Good Sh*t in the tech & fundraising world just for you.

If you are here just for events & opportunities, you won't hurt our feelings. Scroll to Casting Call for Founders!

In this edition, we're chatting about the importance of startups researching investors, learning from, and SAFEs & Convertible note term sheet terminology.

How to Due Diligence VCs

Why Aleberry digs this: Fundraising is akin to finding the right spouse. You can "date" around, but ultimately a term sheet puts you and the fund in a legal long-term relationship. Do your homework to ensure their values (Culture Matters!) & check size match your needs. From a fund perspective, we see the best outcomes from our clients who invest in niche markets. They have the network to boost founders & deep-expertise to advise them. The thesis is generally on point, allowing for a solid focus on scouting & intros.

Key takeaways: 

  • Fund size drives fund strategy & typical ownership.
  • The more niche a fund's strategy is, the better the outcome.
  • Take into account many non-financial variables (geography, industry focus, traction, etc.).
  • If you have concerns or questions, bring them up early on or chat with other portfolio companies about their experiences

When Distribution Trumps Product

Why Aleberry digs this: was not the super sexy Gen Z platform, but it became one of 2019's hottest exits thanks to a solid Go-To-Market strategy. There is a lot of noise out there from wannabe "founders" to wannabe "investors". It's important to learn from the ones who actually achieved your goal. We got our start by building relationships with folks who had successfully exited companies or identified unicorns. This allowed us to weed out the bad advice & notice red flags much faster.

Key takeaways:

  • solved a major painpoint (PMF) & integrated a commonly used tool.
  • Their freemium model with comfortable pricing options shows they understand their clients.
  • The platform's product design & user roadmap forced account creations & allowed data collection.
  • Identifying advocates & industry players (accountants & large banks) as strategic partners will drive major growth & make a product easy to use.

Understanding the Terms in SAFEs and Convertible Notes

Why Aleberry digs this: Many of our clients are highly technical / deep-tech founders. Mentors, advisors, consultants, and investor relations can guide you. However, you have a duty to understand key terminology BEFORE raising (actually before you even come to us for a deck or investor relations)! More knowledge = better negotiating on term sheets.

Key takeaways:

  • SAFEs & Convertible Notes are used prior to equity financing or as a bridge round.
  • Loads of common terminology seen on term sheets are explained (incl. valuation cap, conversion, preferred stock, pre & post money, etc.)
  • It's all about balance & finding the right fit. You want to protect your business & attract the right investors.

Casting Call for Founders:

Cooley Capital Call: Reston, VA | May 27, 2020. Apply to present by March 27. Get in touch with us for more info!

StrictlyVC Insider Evening: San Francicso, CA | March 25, 2020. Get tickets here!

SXSW: Austin, TX | Mid-March, 2020 (1000s of pitch events, parties, and tacos). Questions? Ask us! Aleberry has been doing SXSW since Photoshop CS3 (not to date us or anything)

Revolution's Rise of the Rest: Wichita, KS; Tulsa, OK; Oklahoma City, OK; NW Arkansas; St. Louis, MO | April 20-24, 2020. Free tickets here!

Female Founded Club: female founders & investors anywhere, anytime! Apply here and drop Aleberry's Gira Wieczorek as a mention!

Client Spotlight:

Congrats to Camden Partners on the launch of their fund's new site this past week! The Camden team are fantastic to work with. is brought to you by Aleberry & Webflow.

Camden Partners is a Baltimore-based private equity firm providing growth and seed capital to companies in our targeted sectors of education, healthcare, technology and business services.

Nexus Management, the VC arm, was created by George Petrocheilos and Dr. Jacob Vogelstein to invest in breakthrough biomedical technology companies created or referred by Nexus Venture Partners, an elite group of world-renowned, serial scientist-entrepreneurs.

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