The Basicsof StartupFinancing

Show me the Money!

— This article covers the Basics of Startup Financing. Advanced concepts can be found in the long version of this article —

SETTING THE VALUATION

• How do we set the valuation for a seed round?
  How much money for how much equity
• Venture Capital 101 for Startups — Valuation
  Basics terms
• Pricing A Follow-On Venture Investment — by @FredWilson
• 7 Rejections — by @bchesky
  Airbnb CEO explains how the startup once tried to give away 10% of the company for $150K — and nobody subscribed
• Determining Valuation Multiples — by @FredWilson

TERM SHEET & CAP TABLE

• Startup Lawyer
  Educate yourself about startup legal matters
• Equity basics: vesting, cliffs, acceleration, and exits
  Basic terms
• Founder Vesting — by @cdixon
• 10 Terms You Must Know Before Raising Startup Capital
• Term Sheet Series Wrap Up — by @bfeld
  Detailed explanation of main terms

STARTUP EQUITY FOR EMPLOYEES

• Joining a Startup? Negotiate Equity and Salary with Stock Option
  When the Series A VC buys approximately 20% of the company, you will own approximately 20% less of the company
• If You Want To Get Rich At A Startup, You’d Better Ask These Questions Before Accepting The Job
• Option Pool
  Basic option pool questions, including dilution
• Valuation and Option Pool

EQUITY VS DEBT

• Comparing Equity, Debt And Convertibles For Startup Financings — by @georgedeeb
• Should I raise debt or equity?
• What are the benefits of debt in a seed round?
• What should the conversion discount be for a bridge note into preferred stock?

TOOLS

• Equity Investment Simulation
  Tool to calculate the impact of raising money on existing partners
• High Tech Startup Valuation Estimator
• VC Nemesis
  A free tool to see who’s invested in the competition

Happy reading,
— Livio (@LivMKk)

URL.05.03

— Find other links to relevant articles in Startup Links (collection) —

P.S.: If you care about raising funds, you should read about Startup Financial Planning

Startup Financial Planning