Raising money is one of the most consequential and least understood things a founder does. The vocabulary is dense, the terms are consequential, and the mistakes are expensive. This guide gathers everything we have written on venture financing into one place, ordered so you can start with the fundamentals and work toward the finer points.
Read it in order if you are new, or jump to the section you need. Everything here is educational, not investment or legal advice, but it is the map we wish every founder had before their first raise.
We invest as principals in regulated industries, so this is the same terrain we operate in ourselves, and the guide reflects how we actually think about it.
Fundamentals
- How Early-Stage Companies Get Valued. There are no earnings to discount, so valuation is less arithmetic than negotiation.
- How VC Fund Economics Work. Management fees keep the lights on; carry is the real prize, and it aligns the fund with the founder.
- Bridge Rounds and Down Rounds. One buys time to the next milestone. The other prices the company below where it was. Neither is fatal.
- Startup Dilution, Explained. Owning a smaller slice of a bigger pie is the goal, not the problem. Losing track of it is the problem.
- Vesting and the One-Year Cliff. Equity you earn over time, with nothing vesting until you have been around long enough to count.
- Pre-Money vs. Post-Money Valuation. Two words, one plus sign of difference, and a lot of founder ownership riding on which one you mean.
- What Is a 409A Valuation?. An independent appraisal that sets the price at which employees can buy their options, and keeps the IRS satisfied.
- How to Read a Cap Table. A cap table is just a list of who owns what. Reading it well tells you where the company is really headed.
- How a Priced Equity Round Works. A real valuation, new shares, and everything that was deferred now comes due.
- SAFE vs. Convertible Note. Both defer the valuation. One is debt with a clock and interest; the other is not.
- What Is a SAFE?. A simple agreement for future equity: money now, shares later, without setting a price today.
Deal Terms
- Board Seats and Control. Owning most of the shares and controlling the company are not the same thing.
- The Term Sheet Clauses That Matter. Valuation gets the attention. Control and economics clauses decide the outcome.
- The Option Pool Shuffle. Where the new option pool comes from decides who really pays for it, and it is usually the founder.
- Pro Rata Rights, Explained. The right to keep your slice from shrinking by investing again in the next round.
- Liquidation Preferences, Explained. Who gets paid first when the company sells, and how much before anyone else sees a dollar.
Operating
- What Product-Market Fit Really Means. Not a survey score. The unmistakable feeling of demand pulling the product out of your hands.
- Burn Rate and Runway. How fast you spend, and how long that leaves before you must raise or turn profitable.
- Compliance as a Growth Lever. Handled well, the thing that slows most companies down is what lets ours move faster.
Investing
- What Investors Mean by a Moat. Not what makes you win once. What stops the next well-funded competitor from taking it back.
- Regulatory Diligence in Fintech, Health, and Legal. In regulated markets, the diligence that decides the investment is the diligence most investors cannot do.
- How an Operating Company Runs Diligence. The best diligence question is one you can grade, because you have already answered it yourself.
- What We Look For in a Regulated-Market Founder. Grit and vision are table stakes. In regulated markets we look for two rarer things.
- Why We Invest Where We Operate. The best diligence is having already built the thing.
Thesis
- Why Regulation Is a Moat, Not a Cost. Everyone treats compliance as a tax on building. The empty markets it creates are the opportunity.
Fundraising is learnable. Start with the fundamentals and work down.