Investor legacy (was: Know your needs)

Suggested topics & further reading:

Current investors

Who are current investors in your company, if any? You can mention them by (company) name and by type of deal (e.g. seed capital, (convertible) loan, angel investor). This can also give you some ‘social proof’ to new investors.

Cap table

A cap table shows who current shareholders are and what percentage of the company they own. This is relevant information to new investors, for example to see that founders still have a significant enough amount of shares to keep being motivated and to understand what other investors have a say in the direction of the company.

Reading:

Financial agreements

If your startup raised funding from investors before, including equity, debt or convertible debt, you’ve had to make financial agreements, e.g. on:

  • Valuation
  • Interest rate and repayment agreement
  • Discount rate and valuation cap (for convertible)

You can summarize the key financial agreements that you made in the past, as this helps new investors to understand the ‘financial legacy’.

Funding resources

Videos

Books

  • Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist
    Venture deals is ideal for acquainting yourself with the venture capital process–from the first to the last step. The book covers how VCs operate and covers all the essential terms surrounding investing; from vesting and anti-dilution, to drag-along agreements. It relates all the terms with real business cases, and is full of advice from venture capitalists and entrepreneurs. It is also a great primer for preparing yourself for a venture negotiation, with negotiation tactics and a review of the most crucial terms of a term sheet. A must-read if you’re seriously looking into raising capital. View book
  • Venture Capital Deal Terms
    View book
  • Mastering the VC Game
    Written by someone who has been in both a startup role and a VC role, this light read is a great guide to understanding the relationship between a startup and a VC negotiating for a deal. It can guide you through ways of negotiating a funding deal, such that the VC’s vision coincides with your’s–and the deal grows into a partnership. It also covers ways of pitching your startup and highlights the important details of a single deal. A book full of insights, examples and narratives drawn from the author’s experiences and from interviews of people in businesses. View book
  • What Every Angel Investor Wants You to Know: An Insider Reveals How to Get Smart Funding for Your Billion Dollar Idea
    A great read for any smart funding enthusiast! It uncovers ways for establishing relationships with investors who match your smart needs. In a light, though-provoking manner, the author shows the very specific smartness that investors want to experience in a company, even before getting to the financial details. It illustrates the need for: an exit strategy, “do” (rather than “due) diligence, authenticity and concrete evidence of customer validation. It goes into the minds of angel investors, showing how they view crowdfunding, teams, scalability, due diligence and term sheets. View book
  • The Art of Startup Fundraising: Pitching Investors, Negotiating the Deal, and Everything Else Entrepreneurs Need to Know
    A very practical guide to raising capital in the modern world of digital finance. It gives generic, but concrete explanations, tips and tricks on the entire funding process from seed stages to growth stages; giving a set of tools to build financing strategies in the modern startup world. With insights on setting milestones, understanding investment types, identifying funding rounds, gaining momentum and avoiding the common mistakes, this book is a fine blueprint for carving your financial game plans. View book
  • The Entrepreneurial Bible to Venture Capital: Inside Secrets from the Leaders in the Startup Game
    In the author’s own, concise words: “The Entrepreneurial Bible to Venture Capital is packed with invaluable advice about how to raise angel and venture capital funding, how to build value in a startup, and how to exit a company with maximum value for both founders and investors. It guides entrepreneurs through every step in an entrepreneurial venture from the legalities of raising initial capital to knowing when to change tactics.” View book
  • Raising Capital: Get the Money You Need to Grow Your Business
    With hypercompetitive landscapes in scoring startup funding, this book stands out with its highly practical, straightforward tools for fulfilling all the formalities surrounding: financing, business plans, loans, offering materials etc. It covers everything from VCs and IPO, to franchising and acquisitions. With its concrete nature that incorporates lists, charts and template forms, this book offers detailed strategies for building the financial wing of your business. View book
  • The Startup Funding Book
    Perhaps the most accessible, comprehensive and straightforward book on the market – specifically geared towards the topic of startup funding. It answers all the key questions that startup founders can have regarding funding; from whether they even need external financing, to knowing how to contact investors to get it. This book practically teaches you how to think like investors, and to use those insights to be more persuasive towards banks, VCs and angel investors. Definitely a must-read for any startup looking for smart funding, with the first hundred pages of the book downloadable for free! View book

Startup tools

  • The Complete Startup Toolkit
    It is exactly what the name says it is! Contains countless valuable resources: tool directories, curated lists, freebies for entrepreneurs, tools to learn programming, web development resources, digital marketing resources and much more View tool
  • Startup Resources
    “Tightly curated lists of the best startup tools”; features tools nicely categorized into a really diverse set of topics. View tool
  • StartupStash
    “A curated directory of resources & tools to help you build your Startup”: Contains everything you need from A to Z. View tool
  • Steve Blank’s Startup Tools
    A comprehensive list of startup tools; on topics ranging from finding co-founders and developing apps to customer development, recruiting and startup funding. View tool
  • Y Combinator’s Startup Library
    A curated list of articles covering everything surrounding startups: Scaling, hiring, pitching, equity, fundraising, valuation etc. Also contains must-read startup books and a free course on starting a startup. View tool

Websites and articles

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Suggested topics & further reading:

Current investors

Who are current investors in your company, if any? You can mention them by (company) name and by type of deal (e.g. seed capital, (convertible) loan, angel investor). This can also give you some ‘social proof’ to new investors.

Cap table

A cap table shows who current shareholders are and what percentage of the company they own. This is relevant information to new investors, for example to see that founders still have a significant enough amount of shares to keep being motivated and to understand what other investors have a say in the direction of the company.

Reading:

Financial agreements

If your startup raised funding from investors before, including equity, debt or convertible debt, you’ve had to make financial agreements, e.g. on:

  • Valuation
  • Interest rate and repayment agreement
  • Discount rate and valuation cap (for convertible)

You can summarize the key financial agreements that you made in the past, as this helps new investors to understand the ‘financial legacy’.

Read more