Anyone vaguely familiar with the venture capital industry knows that down rounds are bad news. But what exactly are they, and why do they occur? What alternatives do founders have to avoid a down round? Toptal Finance Expert Natasha Ketabchi draws on her experience in the VC industry to run through the mechanics of a down round, its implications and effects, and concludes by offering some vital advice for founders and investors keen to avoid the dreaded down round.Continue reading →
Revenue-based financing allows an entrepreneur to repay an investment over time, to retake ownership of their business, and give a capped return to investors. With founders increasingly rejecting the scale-at-all-costs mentality, this article investigates the math of revenue-based investing and whether in VC it is possible to play averages over home runs.Continue reading →
Burn rate is one of the simplest, yet most fundamental metrics that investors and startups focus on. It pertains to the total cash spend of the business per month, which demonstrates both growth progress and potential runway that the business has to survive. This article introduces the burn rate concept and the tactics that can be applied to optimize it.Continue reading →
Startup investors are not benevolent creatures, they’re looking for certain signals that help to persuade them to part with their money. This guide, written from an investor’s perspective, intends to help startups understand the key areas to focus on and emphasize when raising money.Continue reading →
Fundraising is hard to get right, which is why companies of all sorts often turn to fundraising experts for help and advice regarding the fundraising process. There is a multitude of different professional figures that help companies raise capital, but for startups and growth companies, the two figures most often encountered are fundraising consultants and broker-dealers.
Despite many similarities between the two, there are some important differences that startup founders and company managers must understand if they are thinking of turning to one of these for help. In this article, Toptal Finance Expert Aleksey N. Krylov explores various features of both service providers and discusses the pros and cons of working with either one.Continue reading →
Popular rhetoric states that you need a team to found a startup. But what if you don’t have the desire or the right co-founders to start a new venture in a team? Contrary to popular belief, there are many successful solo ventures. This guide presents some tactics for solo entrepreneurs to follow when starting a solo venture.Continue reading →
Convertible notes have become an increasingly popular and common method for raising capital by startups, but how well do founders truly understand the implications of going down this route?
In this article, Toptal Finance Expert Jeffrey Briggs outlines the basics of convertible note structures, and runs through the pros and cons of using them to raise money for new entrepreneurial ventures.Continue reading →
Eyeballing the top-line figures of company growth is unlikely to uncover anything particular radical. To understand the trends that lead to user growth, retention, and/or engagement, statistical tools should be employed to test the underlying drivers behind performance.Continue reading →
VC and PE fund structures are traditionally raised in the closed-ended manner, through limited partnerships with end dates. A less common alternative to this is an open-ended/evergreen fund, an ongoing structure that continues indefinitely. In this article we discuss the nuances of open-ended funds with a GP from B37 Ventures, who raised and operates one.Continue reading →
To unlock growth in a company, you must first find the KPI that is core towards increasing company value. More effective knowledge of growth comes from a deeper understanding of the characteristics of a “perfect client,” the trends between user cohorts, and finding the tipping point that solidifies retention and engagement.Continue reading →
Attention on the financial aspects of startups tends to focus on the external measure of fundraising. Yet before this, there are many aspects for an entrepreneur to consider regarding setting their business up for financial success.
In this article, we address eight vital considerations to take around the equity, budget, and valuation components of a startup.Continue reading →
Four years on from the signing of the JOBS act, equity crowdfunding remains a small, niche market. In this article, we take a look at the current state of equity crowdfunding in the US and assess some of the challenges the market faces if it wants to grow into its potential.Continue reading →
Despite the large increase in resources aimed at helping founders navigate the fundraising process, many still struggle when it comes to comprehending certain term sheet clauses.
Such clauses can lead to founders losing control of their company or payout structures upon exit down the road. This post breaks down the term sheet’s trickiest clauses and the implications thereof.Continue reading →