Starthawk’s Post

🌟 Unlock the secrets to startup success with our latest article on Valuation Strategies! Discover how to attract investors, navigate fair negotiations, and position your business for long-term growth🚀: https://lnkd.in/gUgF2vMA #StartupSuccess #ValuationStrategies #LongTermGrowth

𝐖𝐡𝐚𝐭 𝐚𝐫𝐞 𝐭𝐡𝐞 𝐝𝐢𝐟𝐟𝐞𝐫𝐞𝐧𝐭 𝐭𝐲𝐩𝐞𝐬 𝐨𝐟 𝐢𝐧𝐯𝐞𝐬𝐭𝐨𝐫𝐬? There are many different types of investors, including: 𝗔𝗻𝗴𝗲𝗹 𝗶𝗻𝘃𝗲𝘀𝘁𝗼𝗿𝘀: Wealthy individuals who invest their own money in early-stage startups in exchange for equity. They often provide mentorship and guidance in addition to capital. 𝗩𝗲𝗻𝘁𝘂𝗿𝗲 𝗰𝗮𝗽𝗶𝘁𝗮𝗹𝗶𝘀𝘁𝘀: Professional investors who pool money from various sources to invest in high-growth companies in exchange for equity. They typically look for companies with significant growth potential and a strong business plan. 𝗣𝗿𝗶𝘃𝗮𝘁𝗲 𝗲𝗾𝘂𝗶𝘁𝘆 𝗳𝗶𝗿𝗺𝘀: Companies that invest in established businesses with the goal of eventually taking the company public or selling it for a profit. They often focus on companies that have a strong track record of financial performance. 𝗖𝗿𝗼𝘄𝗱𝗳𝘂𝗻𝗱𝗶𝗻𝗴: A platform where a large number of people invest small amounts of money in a company or project in exchange for rewards, equity, or other incentives. This type of investing is often used for early-stage startups or creative projects. ABFL can provide solutions and guidance to business owners as to the various options in the marketplace and to suggest ways to advance a discussion with specialist providers of funding that can assist. #Investors #Entrepreneurship #Business #UnitedKingdom

Fazlur Shah Thanks for this neat, thread by thread explanation! The beauty of the captable sheet lies in its ability to provide major strategic information about a business, both financial and non-financial, "provided" it's maintained in a pre-required manner. Captables, a sheet explaining who owns what, are one of the most underrated strategic areas that most of the early-stage founders, maybe experienced founders too, tend to overlook in day to day operations:- 1. Unequal distribution amongst co-founders. Disproportionate sharing of equity amongst founders, which is inversely related to the value they contribute in building the firm. Sometimes it's the influence that one co-founder may have over another along with strategic issues in negotiating pro-rata equity amongst the founders. These factors might indicate incompetence at a firm level to understand equity, it's distribution and the overall impact (How beautiful that a single cap-table sheet tells you the story!) 2. The term "Fully Diluted basis" is another major hurdle. Founders find it difficult to keep track of dilution especially with these exotic convertible instruments that link financial and non- financial mile stones to ownership. It's very important to have a real-time, "post-dilution" view of the captable every time a founder makes a strategic decision. One major reason for this is lack of infrastructure available with the founders that calculates a real time dilution. In my view, founders should subscribe to any SAAS based platform that does this instead of Excel sheets. I used to work with a firm that had approached this problem very systematically and developed a tool that was effective in this. 3. Inefficient equity negotiations & Over dilution is one area where the circumstances play a major role. Early-stage startups may become desperate for funding that they have a seed-round or a pre-seed at the cost of bleeding too much in equity. I have seen pre-seed, seed rounds that give away more than 20-25% due to, say maybe, a funding desperation. Is it completely wrong? Can't say as there could be situations where accessing capital becomes very, very difficult and the founders settle for it. 4. Term sheet restrictions where early investors have upper hand in negotiations where the founder's need to have intial funds while letting go of the liberty is something that causes the damage too.

Dilution is a game-changer in the world of startup finance. This blog is your guide to understanding and managing it effectively. We break down the mechanics, share strategies, and navigate the fundraising landscape to empower founders. Your startup's future success depends on it! Rooled's financial experts are here to help you strike the right balance between capital and ownership. We've got your back on this entrepreneurial journey. Dive into the blog and let's chart a course to sustainable growth! LINK: https://ow.ly/txCc50PSf1u #Finance #CFO #Accounting #Tax

A Founder asked how to know whether their CapTable is broken/ uninvestable or not.   - An uninvestable cap table of startups typically has complex, disproportionate equity distribution, numerous early-stage mistakes, or legal issues, making it unattractive for potential investors or further fundraising.   1. 💰Over Diluted Founder’s Shares: - While there are no rigid rules, the founders should collectively own more than 50% of the company after Series A, which roughly translates into collectively owning 70% after Seed, and employees would have another 10% in the form of ESOP   - 🎓 If the project is a university spin-off, the university should own ~5% of the company, not 20% or more as is sometimes the case. Be careful about Dead Equity   - Some or all Founding team members left the company   2. 🏃♂️Lack of Vesting Schedule: If the Founders are fully vested from the very beginning, then there is a risk they might leave the company.   3. A Zoo of Investors- A surplus of Inactive shareholders can hinder decision-making and discussion   4. 🛡️Excessive protective provisions by existing investors may discourage new ones.   💸  Debt Conversion Impact: Significant Convertible debt to equity conversion can dilute future investment, deterring potential backers   🚀 For founders seeking guidance on modeling a CapTable and Distribution Waterfall in Excel, I've prepared an Excel Sheet and a Word document to assist Startup and VC ecosystem builders   Here is the link for the Excel Sheet and Word Document: https://lnkd.in/dSeNiaqf   That’s it for today.   I’m Fazlur Shah Click my name + follow + 🔔 ♻️ Reposts ♻️ Comments & Likes Are Appreciated Image Credit: Extantia    #startups #entrepreneurship #venturecapital #investing #finance #fundraising

Securing investor trust and funding is always an acute problem for many companies, especially when operating in a market that’s going through a downturn. If founders want their businesses to endure and look attractive even in hard times, there are a number of key characteristics that they should pay attention to, both within their companies and in the surrounding market. Greg Waisman, Co-Founder and Chief Operating Officer at Mercuryo, one of our clients, has recently come out with a new article on Entrepreneur Media on this subject. Be sure to give it a read, as it highlights some of the key strategic measures that can help businesses inspire confidence in potential investors and attract new capital 👇 https://lnkd.in/gT2FypFU

Join the ultimate investment partner for aspiring entrepreneurs and accredited investors - AdValorem Angel Syndicate! With our expert guidance and strategic approach, we turn startup ideas into thriving businesses. Plus, being a part of our syndicate allows for collaboration with experienced investors. Don't miss out on the future - join us today at angelinvestorwanted.com #AdValorem #AngelSyndicate #InvestmentPartner #StartupDreams

Pitching to investors can make or break your startup's funding prospects. But it's crucial to avoid common mistakes that can hinder your chances of success. Learn how to research investors, focus on the problem, create a clear pitch, set a realistic valuation, and embrace feedback. Maximize your chances of securing funding by steering clear of these pitfalls! Read more here: https://lnkd.in/dDQtFT6F

🔍 Anticipate our next article: "Unlock the Full Potential of Startups: A Deep Dive into Low Basis Stock Tax Benefits." A must-read for savvy entrepreneurs looking to revolutionize their financial strategy. #FinancialInsights #StartupSuccess #NestFinancial

Thank You for Joining Our Structured Finance Webinar 🌟 We're thrilled to share that our "Unlock Growth with Structured Finance" webinar was a phenomenal success, with 80 attendees joining us to explore innovative financial strategies for startups. A heartfelt thank you to our industry experts, Mr. Sriram Sundaravadanan and Mr. Madhu G N, for sharing their wisdom and insights. Your participation and the vibrant discussions truly made this event a melting pot of innovation and strategy. The energy was electric and the insights were invaluable as we delved into how structured finance can be a game-changer for startups looking to scale. The engagement from every attendee brought to life the spirit of Startup Tales – collaborative, curious, and always forward-thinking. 🔗 Key Takeaways: -Structured finance is not out of reach for startups – it's a potent tool for growth and risk management. -Practical tips on how to leverage financial instruments for your startup’s benefit. -The collective wisdom of 80 like-minded entrepreneurs and investors. We're just getting started. Keep an eye on this space for more events that empower and inspire the entrepreneurial spirit. Till next time, keep innovating, keep growing, and let's revolutionize the startup ecosystem together. Be a part of our ever-growing community, Register now: https://lnkd.in/g29ceTMB Krishnamani Kannan | Arunkumar S #StartupTales #WebinarSuccess #StructuredFinance #StartupGrowth #FinancialStrategy #Entrepreneurship