10 Unwritten Rules for Venture Savvy Founders

Because there’s no user manual for venture capital.

Parul Singh
Startup Grind

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Photo by Tron Le on Unsplash

I’m old enough to remember when VC firms did not compete to see who is the most founder friendly. The firm where I work was explicitly started with the mission of being a founder-aligned VC because this didn’t always exist. Overall, this has been a very welcome development for founders. Luckily, these days there are fewer trap doors for founders and slow-release poison pills in term sheets. But they do sometimes exist and from my viewpoint as a former founder, venture dynamics are still tricky for founders to navigate, at least until they’ve been through multiple rounds of funding and sometimes an acquisition — whether successful or unrealized.

In my ongoing quest to make VC more transparent, here are some guidelines for founders on some of these dynamics, and I hope that it will help drive better outcomes for you and your team.

Rule 1: Raising more money does NOT translate into building a more valuable startup.

We have the receipts here (in the form of post-IPO outcomes for a set of startups compared with how much cash they raised). In fact, if you raise too much money, you may increase the chances of a binary outcome, “hitting the wall” when you get…

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Parul Singh
Startup Grind

forever founder, early stage VC @initialized. lover of startups, UX+ product management