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David Chen

Darren, thanks for taking the time to write this great post. I think its really helpful for newbies like me.

When you talked about going "vertical" instead of "horizontal", exactly what is horizontal? Can you give an example?

Seth Besmertnik

Darren, great post!

I'd love to see a follow up post digging into phase 2 of working with VC's. For example, the pros and cons of raising more or less money. Your thoughts on valuation and when it is important/not imporant.

Nabeel Hyatt

Good overview Darren. The one thing I would add is that there are a lot of VCs (and not just the innovative one's) that are adjusting the model slightly to come in a little bit earlier to some deals. In Boston, I've seen a half dozen deals this year where a VC came in at $250-500k -- often alone -- to seed an idea. This is partly a reaction to the fact that a lot of software companies can get started for less, and that with exit valuations where they are those VCs need more of the company at the end.

However, by and large all of these deals were with:

- Founders that the VCs already knew (although not necessarily big shots or folks that had made them money)

- In an industry that they already understood (more comfortable with tracking seed stage and picking a winnner)


This is a wonderful post. It's hard to get information like this. Love to hear candid experiences from the ones that have been in the trenches.

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