Category Archives: Funding Financing for Startups Growth Companies and Investors
What Is a Seed Round?
The seed round is the first real outside money most startups raise. Friends-and-family money usually falls into the “pre-seed” category. Seed funding is when founders begin taking checks from people expecting venture-style returns: Angel investors; Syndicates; Seed funds; Accelerators; and Institutional investors. The terms accepted during the seed round often shape every financing round… Read More »
What Is a Minimum Viable Product (MVP)?
If you are raising money, somebody is going to ask whether you have an MVP. Here is what they actually mean. An MVP — minimum viable product — is the smallest functional version of a product that allows a startup to test whether users actually want it. Not a polished launch. Not a perfect… Read More »
SAFEs vs. Convertible Notes: What Founders Actually Need to Know
There are two common ways to raise early-stage money without negotiating a valuation immediately: SAFEs; and Convertible notes. They are similar in some ways. They are very different in others. Most founders should understand both before signing either. The SAFE: The Modern Default A SAFE — short for Simple Agreement for Future Equity —… Read More »
How Much Equity Should Founders Give Away?
The honest answer: as little as you can reasonably give up without killing the round. Founders often underestimate how expensive early equity becomes later. At the beginning, equity feels cheap and cash feels scarce. If the company succeeds, that relationship flips. How Equity Dilution Works Equity financing means investors contribute capital in exchange for… Read More »
What Is Equity Financing?
Equity financing is the trade most founders make first: ownership for cash. The math is simple. The consequences are not. Unlike debt, equity does not get repaid. It stays on the cap table permanently, and the people receiving it gain economic and governance rights in the company. What Equity Financing Actually Means Equity financing… Read More »
What Is an Angel Investor?
Raise enough money and you will meet two species of investor: the angel and the VC. They write checks that look the same on a bank statement. Everything else about them is different. Angels are individuals. VCs are institutions. Angels usually write the first meaningful check; VCs often write the second. Angels make decisions… Read More »