Investment Basics for Startups: Your Friendly Launchpad
Chosen theme: Investment Basics for Startups. Step confidently into fundraising with clear explanations, founder-tested strategies, and practical stories that make early-stage investing feel accessible, energizing, and achievable. Subscribe for weekly insights and share your milestones with our community.
Funding Stages 101: From Idea to Series A
Bootstrapping builds operational discipline and validates real demand before outside capital. If you take friends-and-family money, document terms, set realistic expectations, and share updates regularly. Reply with your bootstrapping wins and subscribe for templates and checklists.
At pre-seed, investors want a compelling problem, sharp insight, and a focused roadmap. At seed, they expect early traction, active user feedback, and a credible plan to unlock repeatable growth. Share your traction metrics for feedback.
Series A investors typically look for consistent growth, strong retention, and efficient acquisition channels. Think clear unit economics, leadership depth, and product-market fit. Tell us your biggest Series A question, and we will explore it in a future post.
Equity: Clean but Heavier
Priced equity rounds bring clarity on valuation and governance, but legal processes take longer. They fit when you have strong traction and want durable alignment. Comment with your equity questions for a follow-up Q&A.
Convertible Notes: Debt That Converts
Notes start as debt and typically convert at the next round’s terms, often with a discount and valuation cap. They are fast but can stack complexity. Tell us your note terms, and we will share optimization tips.
SAFEs: Speed and Simplicity
SAFEs are streamlined agreements that convert to equity later, using caps or discounts. They reduce legal overhead, great for early momentum. Subscribe to get our SAFE checklist and a founder story on negotiating a fair cap.
Term Sheets Without Tears
Liquidation Preferences in Plain English
A 1x non-participating preference means investors get their money back first, then share the rest pro rata. Higher multiples or participating structures skew outcomes. Share your draft terms, and we will explain trade-offs.
Pro Rata, Information Rights, and Control
Pro rata rights let investors maintain ownership. Information rights define reporting, while board seats shape governance. Balance transparency with agility. Ask for our board agenda template by subscribing for weekly founder tools.
Founder-Friendly Negotiation
Negotiate around priorities: control, speed, and hiring. Concede on less critical items to protect mission-critical terms. Tell us your top concern, and we will publish a negotiation script tailored to early-stage founders.
Pitching and Storytelling That Investors Remember
Open Strong: Problem-Market Insight
Lead with a vivid problem, a specific user, and a crisp insight you uniquely own. Prove it with behavior, not opinions. Share your opener in the comments, and we will feature standout examples.
Metrics That Signal Momentum
Highlight activation, retention, and efficient payback. A simple chart beats clutter. Use cohort views to show stickiness. Subscribe to receive our sample pitch deck outline and real-world metric ranges by stage.
Due Diligence Prep: Be Ready Before They Ask
Include corporate docs, cap table, financials, hiring plan, product roadmap, security policies, and customer references. Keep a living changelog. Subscribe for our data room template and a redacted example from a successful raise.
Due Diligence Prep: Be Ready Before They Ask
Assign IP to the company, confirm contractor agreements, and manage open-source licenses. Clean up before diligence, not during it. Ask your top IP question, and we will invite an expert to answer.
Runway and Use of Funds: Make Capital Count
Runway Math You Can Trust
Runway equals cash divided by net burn. Track actuals monthly, and model scenarios with hiring changes. Tell us your current runway, and we will share suggestions to extend it without stalling growth.
Milestone-Driven Budgeting
Allocate funds to reach proof points: retention targets, sales velocity, or regulatory approvals. Tie each dollar to a measurable outcome. Subscribe for our milestone planning worksheet and examples from real seed rounds.
A Founder’s Cautionary Tale
One founder doubled headcount before nailing activation, burning precious runway. After refocusing on product fit, metrics rebounded and the next round closed quickly. Share your priority focus, and we will help pressure-test it.