How to Build a Funding Strategy That Maximizes Startup Value
Smart founders build a bottoms-up funding strategy that levels the playing field against seasoned investors. Learn how a funding strategy reduces uncertainty and risk, accelerates fundraising, and dramatically increases founder payouts by 3x or more.
Building A Funding Strategy:
Too many founders rush into fundraising without a clear strategy. Diving right into a pitch deck is alluring and fun, but failing to understand the right funding approach, sources, vehicles and targets leads to higher stress, increased risk, and -- most importantly -- greatly reduced founder payouts.
Learn the right way to fund your startup by first determining how much to raise, when to raise, from where, what type of funds, and from whom. Learn how to maximize valuations, improve fundraising terms, and minimize founder dilution by strategically identifying and leveraging your startup’s inflection points.
This training also covers basic concepts of convertible notes, SAFEs, common/preferred stock sales and how they affect founder ownership. In addition, students will learn how to avoid common and painful founder taxation, valuation and fundraising mistakes.
What You'll Learn
✔ Funding approach:
- Basic fundraising concepts
- Convertible notes, SAFEs and preferred stock
- How convertible instruments convert to stock
- Examples of financial payouts upon an acquisition
- Inflection points: product, sales & marketing, business development & intellectual property
- Estimating inflection point time and cost
- Basic concepts of building a financial model
- How high-level inflection points drive smart fundraising
✘ Funding sources
- Non-professional sources (bootstrapping, friends & family, crowdfunding)
- Semi-professional and professional sources (angels, VCs, etc.)
✘ Funding vehicles
- Considerations of typical early-stage funding (convertible notes, SAFEs & preferred stock)
- How post-money SAFEs increase founder dilution
- Important compensating tasks when using convertible notes, pre-money SAFEs, and post-money SAFEs
- Considerations of common stock fundraising (valuation, tax & ownership issues)
- Comparing friends & family funding vehicles
- Summary and comparison of funding with debt, equity and grants
✘ Funding targets
- Investor alignment and potential value add
- Evaluating investor fit & avoiding bad investors
- Inflection point worksheet (Microsoft Word)
- Inflection point Gantt chart (Microsoft Excel)
- Investor fit worksheet (Microsoft Word)