Spiros Xanthos’ Post

“Running a startup is also how I think about raising money — it’s a process of peeling away layers of risk as you go.” - Marc Andreessen As a founder steering the ship of a startup, cash serves as your vital lifeline. The length of your runway essentially equates to the number of opportunities you have to mitigate your company's risk before embarking on your next fundraising round. The journey of startup fundraising can be likened to a strategic endeavor of risk reduction. With every round of funding, investors foresee certain risks, a portion of which recede as time progresses, consequently boosting the company's value. By meticulously strategizing in advance, founders can fine-tune the timing of their fundraising initiatives, thereby asserting control over the pivotal startup valuation question: "What is our worth?" 🚀 Just read an insightful article by Eric Feng on the importance of timing in startup fundraising. Here are the key takeaways: 1️⃣ Control of Pricing: Startup founders can control when their company is priced. Timing is crucial, especially during economic uncertainties. 2️⃣ Risk and Value: As a startup grows and risks diminish, the company becomes more valuable. Founders must continually remove risks as they grow. 3️⃣ Risk Removal and Value Growth: After raising capital, founders can tackle six general categories of startup risk to grow their value. 4️⃣ Stage-Appropriate Risks: Founders should plan for their next raise immediately after closing the current round, considering what investors will expect from the company the next time they raise capital. 5️⃣ Runway Management: The most important asset to manage is the runway. Founders should try to raise more than they need to remove risks and grow value, and always spend less than they raise. These insights are particularly useful for startups navigating the challenges of fundraising. Check out the link in the comments! #Startups #Fundraising #RiskManagement #ValueGrowth #venturecapital #saas

The toughest part of a startup journey is meeting the capital and operating expenses in the initial years when cash flows are often inconsistent. Here are 5 ways to raise capital without knocking at the doors of angel investors and VCs: https://lnkd.in/daxfNcHQ #startups #funding

when to raise capital

Raising capital checklist.

Struggling to get funding for your startup? The key might be simpler than you think. Elon's fantastic post shares examples of what works and what doesn't in fundraising. Everyone's path is different. Sometimes, you might get early support even without traction, but usually, most experienced investors or seed investors look for signs of it. Here's a simple breakdown using Peter Thiel's framework: → Ideally, be at 'one' before you aim to move from 'one to N'. → It's smart to show progress from 'zero to one' before asking for more funds for expansion. You should know why you need money, and your reason should be clear. For example: Saying you need money to build an MVP can be confusing. An MVP, or Minimum Viable Product, is a minimal product tested in the market to see if people like it, not just something you build. Viability is determined by how the market responds, not just the building process. Eric Reese originally defined MVP as a minimal product that's market-tested and validated. However, now people use it to mean just building the first version and hoping for traction. I wish we used different words, but that's how it is now. In short, think about raising capital only if: 1. You really need it. 2. When you're confident that your product is ready and can give positive returns to your investors. If not, it's better to wait. #startups #startupfunding #startupgrowth P.S. If you think this was useful, please share it with others and follow me, Dr. Kanth Miriyala, Ph.D, for more on web3 startups, early-stage startup funding, and remote hiring.

Successful Startups always need lots of VC cash? With the elusive hunt for VC funds becoming an increasing challenge, there are other ways to help your startup reach profitability. Read our pathway guide to profit article. https://bit.ly/3OsOLQb #Profit #Startup #VCFunding

Successful Startups always need lots of VC cash? With the elusive hunt for VC funds becoming an increasing challenge, there are other ways to help your startup reach profitability. Read our pathway guide to profit article. https://bit.ly/3OsOLQb #Profit #Startup #VCFunding

Are you planning to 𝗿𝗮𝗶𝘀𝗲 𝗰𝗮𝗽𝗶𝘁𝗮𝗹 for your startup? 𝗧𝗶𝗺𝗶𝗻𝗴 is crucial. ⏳ There’s no perfect “timing strategy” to raise, as every company evolves differently. But raising too early can be risky:  → Inability to make a solid case → Waste valuable time And raising too late can bring bad consequences too:  → Missed market entry → Being quickly outcompeted Here’s a checklist to know if you’ve reached 𝗙𝘂𝗻𝗱𝗿𝗮𝗶𝘀𝗶𝗻𝗴 𝗥𝗲𝗮𝗱𝗶𝗻𝗲𝘀𝘀 👇 ✅ Your MVP is ready  ✅ There’s proven customer traction/market demand ✅ There’s a solid business model and healthy unit economics  ✅ Your small team needs extra hands to meet demand Once you’ve reached Fundraising Readiness, it’s easier to justify 𝗪𝗛𝗬 you’re raising ⬇️ 👎 Examples of 𝘯𝘰𝘯-𝘢𝘤𝘤𝘦𝘱𝘵𝘢𝘣𝘭𝘦 fundraising narratives  → “We need money to build an MVP”  → “I want to extend the runway so I can have peace of mind” 🎯 Examples of 𝘢𝘤𝘤𝘦𝘱𝘵𝘢𝘣𝘭𝘦 fundraising narratives  → “We know we can reach X DAU and we need $Y to achieve this milestone in Z months instead of N years”  → “We’ve lowered CAC by X% in Y distribution channel in less than Z months, we’re ready to scale fast” Some extra fundraising stuff you need to keep in mind 👇 ✅ Ideal cap table structure, % of ownership and dilution up for negotiation  ✅ Corporate and banking documentation to avoid bureaucracy and close fast Raising a huge round shouldn’t be a measure of success per se, but making a solid case indicates you’re in the right direction. If you think you’re almost there, let’s talk!   #founders #startups #investors #venturecapital PS 🔔 Follow me for posts on startups, venture capital, and fundraising. Looking to reach Product-Market Fit? 👉 Send me a private message with "PMF" and we can talk. Or see how we build startups here ➔https://salfati.group/ Our customers soar to success with the support of top investors like YCombinator, SVAngel, and Spark Capital.