Prateek Sharma’s Post

5 Areas you should be asking questions about before investing in an early stage startup. To access the full list of questions subscribe to our newsletter: https://lnkd.in/e4_xqsw5 To get started on your angel investing journey today, join the waitlist for the next cohort of our Live Course: https://lnkd.in/e64Pkmdn

“Today I am going to talk about one advice many founders and aspiring founders hear all the time. Get the timing right. You hear that from your mentors, you get that from investors, your hear that from your friends. The million dollar question or the billion dollar question is HOW.” Talk title - Timing hacks for startups Watch Sean Lam's full talk from the Founders Peak stage here: https://lnkd.in/gFgxX9Cn | ADVANCE.AI | Jewel Paymentech

Investors asking for founders to have longer vesting and cliff (like 5y vesting with 2y cliff) is often seen by founders as hostile. Few things why this misconception happens. Founders don't realize how the VC path works: in early-stage startups, there's always another round where new investors will scrutinize the company. The vesting is always done from the perspective of safeguarding the company and its cap table. Would you feel great if a founder could leave their company in a year or two and take 20% of the company with them? What does the new investor think about that 20%? Most likely that this company has 20% of the cap table not contributing to the success of the company. Easy pass for the investor.

Sometimes it's hard to know what an investor is thinking but when it comes to tiny pre-seed rounds, right now, they are thinking about runway💰 In other words...how much is needed to propel the businesses to the next funding round? And with the market in a wonky state, most VCs I know have anchored on 24 months of runway just to be safe. So what does all this mean? $200k is not going to cut it for most startups in the US with ambitions to grow and build scalable venture backable businesses. I've recently been pitched two of these super small rounds and I'm worried that the founders will run out of cash sooner than they think (although I appreciate 🙏🏽 the sentiment of being lean and scrappy!) If you're set on raising a very small round, I'd suggest explaining the size early on in any conversation with an investor as they may see this as a red flag 🚩

🔈A toxic relationship isn't limited to personal life but applies to startups as well. Startup success heavily depends on founder-investor alignment around vision, values, and pacing. Founders should carefully vet potential investors and resist pressure to grow unsustainably. With the right investors, amazing things are possible. But toxic investor relationships can sink even the most promising startups. Choose wisely. Punch Capital

Interesting insights here... This research sheds light on the pivotal role that founder personalities play in shaping the trajectory of ventures. It underscores the importance of introspection and self-awareness for entrepreneurs as they navigate the complex landscape of building a business. For investors, these insights offer valuable guidance in assessing potential investments and understanding the human element behind the pitches. #Startups #Entrepreneurship #Investing

📣 Join us LIVE today! 📣 It's almost time: our webinar on "How Family Offices Invest in Startups and VCs" will kick off today at 1:30 PM ET. 🎉 If you've already registered, get ready for an insightful discussion on how family offices approach investing in startups and VCs. 💡 Haven't secured your spot yet? There's still time! Register now: https://lnkd.in/ewrvP94t If you can't join us live, don't worry! Register anyway, and we'll send you the recording. 📹 See you soon! 😊 #FamilyOffices #StartupInvesting #VCInvesting #Webinar #VyzerEvents

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