Fundraising
Funding options, investment instruments and how a raise works.
Tech Entrepreneur
Idea
Find a problem worth solving and prove people have it. Where every first-time founder starts.
Core: start here
- BootstrappingFunding the company from savings and revenue instead of outside investors.
- Venture CapitalInvestment funds that buy equity in risky startups, and what they expect in return.
1 more idea concepts
- Non-Dilutive FundingMoney that doesn't cost equity, such as grants, competitions and revenue.
MVP
Ship the smallest thing someone will use or pay for, and set up the company properly.
Core: start here
- Pitch DeckThe short slide presentation founders use to explain the company to investors.
- Angel InvestorsIndividuals who invest their own money in early startups.
- Funding StagesPre-seed, seed, Series A and beyond: what each round is for and what investors expect.
- Cap TableThe record of who owns what share of the company.
- DilutionHow your ownership share shrinks each time new shares are issued.
- SAFEA simple agreement for future equity: money now, shares at the next priced round.
7 more mvp concepts
- AcceleratorsPrograms that give a small investment, mentoring and a network in exchange for equity.
- VC Power LawWhy a few huge winners return most of a fund, and what that means for the founders it backs.
- Investor UpdatesRegular short reports to investors that keep them informed and willing to help.
- Pre-Money and Post-Money ValuationThe company's value before and after new money comes in, and how ownership is calculated.
- Conversion DiscountA discount on the next round's share price for early SAFE or note investors.
- Valuation CapThe maximum valuation at which a SAFE or note converts into shares.
- Convertible NoteA loan that converts into equity later, with interest and a maturity date.
Product-Market Fit
Get users who stay, pay and tell others; raise your first real round.
Core: start here
- Term SheetThe short document listing a round's key terms before the legal documents are drafted.
- Fundraising MetricsThe numbers investors expect at each stage: growth, retention and burn.
- Liquidation PreferenceInvestors' right to get their money back first when the company is sold.
- Singapore Holding StructureA Singapore parent company owning the local operating company, and why investors prefer it.
- Delaware C-CorpThe US company type most venture investors expect.
9 more product-market fit concepts
- Lead InvestorThe investor who sets the terms of a round and usually puts in the most money.
- Priced RoundA round where investors buy shares at an agreed price per share.
- Revenue-Based FinancingFunding repaid as a share of future revenue instead of equity.
- Running a FundraisePlanning a raise as a process: target list, meetings in parallel, momentum and closing.
- Data RoomAn organized folder of company documents shared with investors or acquirers.
- Due Diligence ChecklistWhat to prepare before investors start digging through the company.
- Investor Due DiligenceWhat investors check before investing: team, market, metrics, legal and technology.
- Singapore FlipRestructuring so a Singapore company owns the existing local business, usually before a round.
- Delaware FlipRestructuring so a US Delaware company owns the existing business, often for US investors or accelerators.
Growth
Make acquisition and revenue repeatable; hire, raise and build a board.
- Anti-Dilution ProtectionTerms that protect investors if a later round is priced lower than theirs.
- Bridge RoundSmaller funding to extend runway until the next big round or milestone.
- Corporate Venture CapitalInvestment arms of large companies, and the strategic strings that may come with them.
- Pro Rata RightsAn investor's right to keep their ownership share by investing in later rounds.
- Signaling RiskWhen an existing investor not joining your next round scares other investors away.
- UnicornA private startup valued at one billion US dollars or more, and why the label misleads.
- Venture DebtLoans for venture-backed startups, used to extend runway with less dilution.
Scale
Run the company: organization, moats, new markets and exits. Repeat-founder territory.
- Down RoundRaising at a lower valuation than the previous round, and its consequences.
- Secondary SaleFounders or early holders selling existing shares, as opposed to the company issuing new ones.