Daniel Sawko’s Post

Term Sheet Win-Win for Startups and Investors #1: 𝐏𝐫𝐨-𝐑𝐚𝐭𝐚 𝐑𝐢𝐠𝐡𝐭𝐬 𝐢𝐧 𝐭𝐡𝐞 𝐅𝐮𝐧𝐝𝐢𝐧𝐠 𝐋𝐚𝐧𝐝𝐬𝐜𝐚𝐩𝐞 They contain important terms, one being "pro-rata." Pro-rata, a standard and widely accepted term, safeguards investors' stakes as companies grow and raise more funds. Here's how it works: If an investor buys 10% of a company's shares in the first round and, in later rounds, new investors come in, that original stake could shrink to 8%. Pro-rata rights allow the initial investor to buy more shares to get back to 10%. This protects against equity dilution from new investors or increased capital raises. But there's a catch: the investor must buy the new shares at the valuation set in the new round. Pro-rata helps balance the interests of early investors and startups in a dynamic funding world. What's your strategy for balancing investor and startup interests? Share your thoughts on pro-rata rights! #vc #startups #TermSheet #Fundraising #menastartups #StartupSuccess #startupstrategy  #startupfunding #InvestmentTactics #MultiplesStartupAdvisory

When an individual decides to invest in a VC fund, it is motivated by the need to delegate into someone. If you don't have the time to select startups and to mentor them, investing in a VC is your best option by delegating in a professional team. Advice: Just talk with the founders they invested in to understand their behavior. You don't want to be associated with a VC that is not reasonable or fair.

The agent. Is the business angel an agent? No, because angels invest their own money. Are the General Managers of VC funds agents of the investors? Yes, because they invest on their behalf have fiduciary duties, and need to give explanations about what they did with the investors' money. The angels run more risks because they invest their money and don't need to give fiduciary explanations in case investments fail. Their merit or their mistakes are their responsbility and their decisions. That's why they are more able to invest in seed and pre-seed and invest in validation phases. If someone needs to invest other's money the capacity to run risks is much more reflected and balanced.

#StartupTerminology A #SAFE, or #SimpleAgreementForFutureEquity, is a popular #investmentinstrument used by #startups. It’s designed to streamline #earlystage #fundraising, offering #investors a #convertibledebt security. Unlike traditional venture capital rounds, SAFEs often have a #valuationCap and a #discountRate. The #valuation cap sets a maximum valuation for #futureequity conversion, while the discount rate offers investors a discount on the #conversionprice. Understanding the terms of a SAFE is essential for both #founders and #investors. A well-structured SAFE can accelerate #fundraising and provide #flexibility, but it’s crucial to consider factors like the #valuationcap, discount rate, and the investor’s rights. #SAFE #startupfunding #venturecapital #earlystagefunding #startupfinance #investing #entrepreneurship #tech

The difference between investing in a VC fund and investing as an angel is NOT the amount of money invested! 💰 The amount of money is often about the same, but the tasks and roles of the investors are different. Of course, there are gray areas, but to explain the main difference, it can be seen as follows: VCs work with an agent model and business angels work with a connector model 🚀 Today, let's take a closer look at the agent model of VCs: 1️⃣The investor gives the money to someone (an agent) 2️⃣The agent takes care of the money and invests it in startups of their choice 3️⃣This agent is also responsible for mentoring and supporting the startup along the way 4️⃣The investor is not involved with the startup 🎁Wait for next week where we will talk about the Connector model and explain the difference in detail. 💡Are you ready to professionalize your business angel career? Join our program here: https://lnkd.in/gmNSSKpQ Rui Falcao Pedro Bandeira #angelinvesting #becomingabusinessangel #businessangeltraining #businessangels #startups #vcs #investing #agentmodel #connectormodel

In the last 12 months, $330 billion has been invested in start-ups. Yet, only 0.05% of those seeking funding actually received it. Of those lucky few, a staggering 75% fail to deliver a return for investors. Is the system broken? It’s clearly not delivering on a macro scale, and we believe it's time to make some improvements. GoPidge VC is creating a new way for investors and start-ups to connect and close deals. We offer vetted ventures to investors and verified value for all. Our commitment is to build equitable, transparent, and impactful relationships that benefit everyone involved. 🌊 The quality of the deal flow is high. 🛅 Access to data rooms is controlled. 📈 Due diligence is included. 📢 All through a subscription model with no carry fees. Join us in making the investing process better for all. More impactful businesses will flourish, and investors will benefit from early access to high-quality deal flow. 🔎 Discover more at www.gopidge.vc #VentureCapital #Startups #Investing #Innovation #GoPidgeVC #AngelInvestors #FamilyOffices #PrivateEquity #DealFlow #TechStartUps #Funding #CapitalRaise

In a slow start of the year for #startup #investing #venturecapital firm Andreessen Horowitz leads the way with 15 January #investments #engineeringrecruitment #recruiting

By whom do startups prefer to get funded? I often hear from founders about where they would like to get cash to develop their business. Angel investors are commonly mentioned. Family offices also appear regularly. VC funds are also present, but less so for early stage startups, especially the one that have not raised money yet. I recently did a poll on the topic, to get feedback from my network. The result might surprise. Angel investors take a strong lead, which suit the rounds. But beyond that, VC funds come in last as an option. There are a few potential explanations. I mentioned early stage, and with the second position of self funding, participants might have assumed it was too early for VC. It could also be that with the tightening of VC investments, founders are considering other options first. One thing that I hear occasionally is that VCs would provide harsher funding conditions. While it is likely a combinaison of reasons, I advise startups to look at all funding options to develop. Including of course VC. Are you a founder? What are you main criteria for selecting investment in you company? Please share it in the comments below. Thank you for reading. Did you appreciate this post? Would you like to see more? Like this post Follow Hugues Hallot 🔔 Ring it on my Profile 🔝 Connect with me #FamilyOffice #Investment #Allocation #VC #startups #founder

Could not agree more with Anamitra Banerji from Afore Capital. Venture funding is a partnership. The VC brings Capital, and other things to help the startup grow, but it mainly brings capital... money you know. And the startup, brings the technology, people, business, customer. But it doesn't have money, this is why they are reaching out and pitching for you to invest in them. Sometimes, the founders and even employees don't have money, and they bring it from their own savings. You want your founders to feel relief and sense of trust when they partner with you. VCs that charge the startup for legal fees, need to understand that it's a bad origin place to start that kind of partnership. Unfortunately, I have seen this in Europe even more than in the US, and in early stages when startups are... let's say the truth, are poor. If you are making a deal, it's all about risk, and that is the price a VC can take, 30k USD of legal fees, don't put that pressure on the founders who don't have that money! #VentureCapital #LegalFees #Negotiation #VentureFundraising #Investments #Startups #DueDiligence #Founders

👋☕ Meet Marie-Christine Razaire (MC), a Principal at Northwestern Mutual Future Ventures. MC specializes in deal sourcing, due diligence, and portfolio monitoring. She brings a wealth of experience from the insurance sector and has been a driving force in our venture initiatives. We spoke with MC about her experience, discover more in a short Q&A below. 🌱 Can you describe our investment approach and what you look for in a startup? At a high-level, I tell founders that we look to invest in startups that can help our clients live longer, better, healthier lives. We typically invest in startups (seed through series B) across #fintech, #insurtech, #digitalhealth, and enterprise SaaS. From a strategic standpoint, we want to be more than a check and leverage our resources as a Fortune 500 company. That could mean knowledge exchange or partnership. We have these conversations prior to moving forward with an investment to make sure that our interests are aligned with the founder’s and that we can be as helpful as possible. From a personal standpoint, one of the things I look for from a founder is the “why”. Why are they starting this company? Are they passionate about what they’re solving for? The “why” should be strong enough to carry them through the highs and lows of being an entrepreneur. 📈 What trends or developments in the financial services sector are you currently most interested in? We’ve seen an uptick in startups focused on the tax space (#taxtech) and remain excited about the evolution of “#advisortech”. In the tax space, we’ve made one investment already, Harness, a tax and wealth management advisory platform. Additionally, we’ve seen a maturation of the advisor tech space, with startups building a variety of solutions that enhance the capabilities of advisors. 📚 What book would you recommend for anyone to read? I recently read “The Year of Living Constitutionally” by A.J. Jacobs, one man’s humble quest to follow the constitution’s original meaning. It was both educational and entertaining. I am currently listening to “Low Sun” by Hermanos Gutiérrez. #insurtech #fintech #innovation #startups #NorthwesternMutualFutureVentures #venturecapital #vcfunding #VC #SaaS