How to Use Venture Debt
Venture debt is not for every startup or for all fundraises. It is best used in conjunction with an equity raise. The equity funding provides ongoing working capital that doesn't need to be paid back. It works well between equity raises from institutional investors. The business must be up and…
How Does Venture Debt Work?
Venture debt can reduce dilution and give your startup more runway. Here are a few pointers to see if venture debt is a good fit for your fundraise: It's often used with equity funding for purchasing equipment, making acquisitions, or making up for funding not acquired through the equity raise.…
What Is Venture Debt?
Venture debt is on the rise in the startup world as more startups find it a useful part of their fundraise strategy. It's a form of debt financing for venture-backed companies that lack the assets for traditional debt funding. Venture debt has been around for as long as venture capital…
The Collaborative Approach to Fundraising
There's an old saying in the angel world: If you want money, ask for advice. If you want advice, ask for money. In raising funding, most founders spend their time selling the idea to the investor. An alternative approach is to collaborate with the investor. The selling approach uses the…
Startup Mental Model
Founders need to bring startup mental models to bear on their business. Here's a list of key mental models to know: 1. Least worst option -- use this model when all options are not ideal. 2. Jobs to be done -- use this model to discover how your product fits…
Your Startup as a Series of Systems
In pitching your business, investors will ask questions about metrics such as customer acquisition cost, lifetime value, and churn rates. The purpose of the question is to discover what systems you have built into the company and how robust they are. In the early stages of a startup, the CAC,…
Time Management for Startups
In running a startup, time management is a key skill for the founder. Here are some key steps in managing time: 1. Set up a schedule with standard meetings, routines, and to-dos that recur each week or month. 2. Schedule your day in advance so you're ready to execute the…
Features vs. Benefits
In pitching your business, focus on the benefits your product or service provides rather than listing out the features. Features answer the question -- what, or what is it? Benefits answer the question -- why, or why do you want it? In pitching your business, go beyond the features of…
How to Blow Your Pitch
In pitching investors, there are many ways to blow the pitch. Here's a list of common mistakes startups make: Losing your temper and letting emotions get the better of you. Investors want level-headed people they can work with. Building the company only for the exit. There must be a "why"…
Importance of Written Contracts
In running a business, it's important to use written contracts. It's easy to negotiate an agreement verbally, but this often leaves loose ends that become a problem later. A written contract makes clear the responsibilities and duties of both parties and what each owes the other. It's often the case…
