Thoughts on Tech Startups and Venture Capital
How many of you know Facebook? Okay, It is not a trick question – all of you, of course. But how many of you remember Friendster? Friendster was the early social network that gained initial popularity, but then fizzled out. The waves of many first technologies go the same way. In 70’s and 80’s people…
You’ve probably have heard that convertible debt (SAFEs and Convertible Notes) are a lot less favorable to founders compared to equity. If you don’t know why read Mark Suster’s post. With equity, it is clear how much of the company you sold. With convertible debt what exactly do you owe to the investor is to be…
Last week we wrote about questions that investors ask founders during investor meetings. This week we are turning the tables and talking about questions that founders need to ask investors. Most founders spend little time asking investors questions, and that’s too bad. First of all, good investors love it when you ask them questions, because it…
Read more 11 Questions Founders Need to Ask Investors During the First Meeting
We’ve written a lot here about fundraising and how it is a complicated, and at times, confusing process. To fundraise effectively you need to prepare and have a strategy, understand different types of investors, understand how much to raise, and create a solid investor pipeline. We have also talked about a fundraising deck, and how to go about putting one together.…
For some reason, folks in tech, particularly investors, have trouble saying NO. Typically, the fear manifests itself in not even bothering to reply. After a number of seemingly positive interactions, the replies just stop. Saying NO, whether to a potential investment, potential hire, current employee, or a family member or friend, is just basic respect and…
In my capacity of Managing Director at Techstars NYC, I spend a lot of time with founders attempting to get funding. Raising money is a complex and rigorous process. It requires preparation and precision. I’ve been writing extensively on the topic here on my blog. I’ve been also collecting the best articles I find around the…
Great founders hate dilution. Great founders are jealous of the equity in the company, because they believe in the vision and the opportunity. One one hand, the founders don’t want to give up equity, and on the other hand they typically need capital to grow the business. Investors are also equity driven. That’s why there is tension in…
Read more Why it makes sense to raise more capital when you can
There are several ways to build an investor deck for your seed round, but there is no perfect way, of course. The common thing between all successful decks is that they are short and clear. Be sure to read 9 seed funding gotchas and 8 things you need to know a about raising venture capital…
Read more The perfect investor deck for raising a seed round
We’ve written a lot here about fundraising and investor introductions. One of the key things to successful fundraising is being prepared, and one of the key pieces of preparation is to correctly target the list of investors. Most founders start with a generic list of potential investors they get from the Internet and other founders.…
When you are going out to fundraise you need to decide how much capital to raise. A typical answer we hear looks something like this: We need to build X features in our product, and we need to hire Y people to make it happen. So our burn would be Z and we need a…
