25 epic, must-read blog posts about fundraising
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 web. In this post, I've compiled the best writing I have found on the topic, with a brief commentary about each post.
1. Metrics Every Entrepreneur Should Know by Heart
by Elizabeth Kraus of Merge LaneHaving solid metrics is a huge benefit for a seed round and an absolute must for series A and beyond. If the founder can't articulate metrics & numbers around the business, investors are very likely pass. Read this post to know what metrics matter.
2. Sixteen Startup Metrics
by Jeff Jordan of A16ZThe team at A16Z pulled together an awesome post on metrics that matter. If CAC, LTV, and GMV aren't in your vocabulary yet, jump in.
3. Startup Growth Calculator
by Trevor Blackwell of Y CombinatorTrying to figure out how much capital to raise? When you will raise profitability? Use this awesome tool from Trevor. Super helpful. Also check out my post on How Much Capital to Raise.
4. Nine seed funding gotchas
by Alex Iskold of TechstarsFirst time and even serial founders make mistakes during fundraising. The most typical mistake? Not being prepared. Other mistakes are doing it too early, or without traction. Read this post to learn what may go wrong in the typical fundraising.
5. Eight Things That Make Investors Cringe
by Lili Balfour of Atelier AdvisorsIn this fun and spot-on post, Lili outlines things that drive investors crazy. Some include lies, stupidity, and cluelessness. Read on.
6. Invest in Lines, not Dots
by Mark Suster of Upfront VenturesFounders and Venture Capitalists have a different view of the fundraising process. Founders want checks fast, while VCs balance strong inclination towards a no with FOMO. In this classic post, Mark explains that the key to fundraising is building a relationship. Check out the related post I wrote about avoiding Happy Ears.
7. Like a First Date
by Joanne WilsonFundraising is a little bit like dating. Go too fast or too slow and it won't work. What to do and what not to do is illuminated by Joanne Wilson, a prolific angel investor in NYC in this Wall Street Journal post.
8. Eight Things You Need To Know about Raising Venture Capital
by Alex Iskold of TechstarsRaising VC is difficult. A lot needs to come together. But what are some of the less obvious things? In this post we talk about things ranging from venture-backable businesses to partner dynamics and fund cycles.
9. Micro VC
by Shaun Abrahamson Greatest GoodMicro VCs are a new type of venture capitalists. They typically write smaller checks compared to VCs, but larger checks than angels. Micro VCs play a critical role in both seed and series A-stage companies. Shaun's epic post demystifies and breaks down all you need to know about Micro VC.
10. Raising a Seed Round
by Steve Schlafman of RRE VenturesAn epic deck that walks you through what you need to put together to raise a seed round. A ton of awesome information, with bonus material for NYC founders. For additional info on the topic read my post on putting together a Perfect Deck for Seed Round.
11. Everything you ever wanted to know about convertible note seed financings
by Scott Walker of Walker Corporate LawAh, the convertible debt. Hated and loved by everyone. It's quick to do, but what are the consequences? Scott talks about the good, the bad, and the very ugly of convertible debt. For more on the topic read these excellent posts by Mark Suster and Brad Feld.
12. Six Body Language Mistakes You Don't Know You Are Making
by Shane Jones of The Press BoxFundraising is as much art as science. When founders meet investors they show them decks and talk about the business. But the deck is not the only thing investors look at. They read founders' body language and pay close attention to their emotions. This fascinating post eliminates what not to do during the pitch meetings.
13. Everything you wanted to know about VC Liquidation Preferences
by Bo Yaghmaie of Cooley Liq prefs. They are no good, right? Well some are, and some are okay. Read this excellent post by Bo to learn all about liquidation preferences and how they impact your outcome as a founder.
14. Valuation and Option Pool
by Fred Wilson of Union Square VenturesOption pool is a tool for you to attract talent and give them skin in the game, right? Sure. It is that and a lot more. Investors ask that the option pool is plenty and comes out of so-called pre-money valuation. What does that mean and why? Read this excellent post by Fred to find out.
15. Want to know how VCs calculate valuation differently from the Founders?
by Mark Suster of Upfront VenturesFounders fixate on pre-money valuation. Investors are all about % of ownership. There are tricks to every single negotiation and VCs know the tricks. Mark Suster opens up and tells you like it is.
16. Venture Capital Deal Algebra
by Brad Feld of Foundry GroupThe exact calculations of any funding round are kind of like voodoo science. Well, not kind of, it is that. Complex spreadsheets, an army of lawyers, and a ton of back and forth. Brad sheds light on how the calculations actually work. While at it, go read another excellent post by Brad on how he thinks about seed investing.
17. Dial-For-Dollar Calls From Some VC Associates
by Bilal Zuberi of Lux CapitalGot a call from an Associate - take it or pass? Who are these Associates and what is their agenda? Read this great rant on the topic from a former associate and now partner.
18. Why Maximizing Your Valuation May be Minimizing Your Chance for Success
by Micah Baldwin of AmazonFounders are obsessed with valuation, while VCs are focused on ownership. Micah explains in this fantastic post why it makes sense to raise on the lower valuation in the earlier days of the company vs. raising high early and then struggling to grow into the valuation. For another excellent take on this, read Fred Wilson's The Valuation Trap.
19. Beware of Post-Money Trap
by Albert Wenger of Union Square VenturesHow investors think about post-money and why it is important to keep it as low as you can. Sage advice from Albert. Fred Wilson also comments.
20. VC Asshat Move #1
by David Cohen of Techstars Beware of competitive dynamics when you raise. There are plenty of bad actors out there. David Cohen puts it eloquently in this post.
21. Fatal Pinch
by Paul Graham of Y-CombinatorGot 6 months or less in the bank? You are running out of money and it is not a great place to be in. Actually, it is much worse than you think. Read this dark and sober post by Paul Graham to find out what your real options are.
22. Three Questions For Startups To Answer For Themselves In A Volatile Fundraising Environment
by Tomasz Tunguz of Redpoint VenturesWhen Winter is here, how do you think about capital and financing of your startup? Read this excellent short post by Thomasz.
23. Drink When Served
by Mark Solon of TechstarsShould you raise more or less capital? Mark Solon, Managing Partner at Techstars argues that it makes sense to raise more capital if it is available. Given the current cool climate and series A crunch, this is sage advice. Also read my post on this topic - Why it makes sense to raise more capital when you can.
24. What Seed Funding Boom Means for Raising Series A
by Josh Kopelman of First Round CapitalRaising Series A is a lot harder than raising a seed round. Seed capital is abundant, while the series A bar is really high. In this awesome, nuanced post by Josh Kopelman, Founding Partner of First Round Capital, founders are given advice on how to think about the Series A funding landscape.
25. The Babe Ruth Effect in Venture Capital
by Chris Dixon of A16ZWhy do VCs obsess with Unicorns? How do VCs make money anyway? Chris illuminates the rise of large funds and dynamic of venture capital and puts it in simple and accessible form. This post is likely to bring you closer to understanding why VCs say NO to so many opportunities. What are your favorite posts on fundraising? Please share with us and we will update the post in coming weeks to include.
