-
Why December is the Best Month to Close VC Deals
As a fractional CFO specializing in fundraising preparation, I often hear founders ask whether it’s too late to close their funding rounds as the year comes to a close. Many assume that investor activity slows down during the holiday season. Surprisingly, the data tells a different story: December is one of the best months…
-
Why Raising at a High Valuation Early On Isn’t Always a Good Idea
In the fast-paced world of startups, securing a high valuation can seem like the ultimate achievement. However, as “Silicon Valley” Season 2, Episode 1 so aptly illustrates, it’s not always the best strategy for long-term success. In this episode, Richard Hendricks and the Pied Piper team are faced with a dilemma: they receive an…
-
Conversion Math: The Devil Is In The Details
You have raised seed via SAFE/Convertible notes and you are now converting them to equity in your first venture round. The convertible agreement is standard. There is a discount rate, a valuation cap and maybe a clause for convertible overhang (if you don’t have the clause or don’t know what this is, read more…
-
What Is Liquidation Preference Overhang and How to Manage It
It is not uncommon for founders to walk away from a successful exit empty-handed. How does it happen? The payout of preference shares might simply exceed the exit value. Since the preference shares sit on top of common shares on the distribution table, the management team walks away with nothing. Imagine building a company…
-
Different Types of Investors and Their Characteristics
Investors come in all shapes and sizes, just like startups. Angels are often the first to take a chance on a fledgling company, writing checks normally in the sub-one million range. If you’re in need of more funds, traditionally speaking, venture capitalists are the next on the line. They can provide a larger sums…
-
Navigating fundraising in today’s investment climate
We are in a surging interest rate environment that is unfamiliar to the majority of participants in today’s economic activities. High interest rates translate to higher costs of both equity and debt. On top of that, we also have heightened geopolitical risk and the rise of generative AI. As uncertainty increases, many investors have…