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Why Equity is Important Equity is a crucial element for several reasons, particularly in the context of small and high-growth companies: Financial Attractiveness for Entrepreneurs: Equity makes entrepreneurship financially appealing. Unlike a traditional job...

The Equity Negotiation Between Kiran and Madhu Here we present a role-play scenario between two co-founders, Kiran and Madhu, negotiating equity splits for their new venture. Initial Positions (Before Negotiation): Madhu's Rationale (played by Aswathi): Madh...

Approaches to Splitting Equity There are two main schools of thought regarding equity splits among founders: Equal Split is a Bad Idea: Some research suggests that companies with equal founder splits struggle to raise external finance, especially from ventu...

Sources of Founder Conflicts Beyond Equity Split Founder conflicts are a significant reason for startup failures, accounting for 65% of high-potential ventures failing due to such issues. These conflicts often arise from various sources beyond just equity divi...

Introduction to Venture Capital Venture capital is a highly discussed and often sought-after topic in the entrepreneurial world. It represents a significant source of funding for startups, with daily news of companies raising substantial amounts of capital thr...

How Venture Capital Firms Raise Money Venture Capital firms raise money by establishing venture capital funds. These funds are the pools of capital that VCs use to invest in startups. Sources of Capital for VC Funds: Limited Partners (LPs) VCs raise money from...

The Role of Venture Capital Venture capitalists (VCs) act as intermediaries between large institutional investors (Limited Partners or LPs) and high-growth startups (investee firms). They are essential to the flow of capital in the venture world. Flow of Funds...

VC Investment Thesis Many VC firms operate with a defined investment thesis. This thesis outlines the specific areas, sectors, or types of companies they are interested in funding. For example, a VC firm like Accel might state their thesis includes disruptive ...

The VC Investment Process The VC investment process typically unfolds in three main stages: Pre-Evaluation: This is a continuous process where VCs actively seek out promising companies. Deal Sourcing: VCs are constantly looking for investment opportunities...

Valuation in Early Stage Ventures What is Valuation? Valuation refers to two things: The value or price of a company: For example, stating "the valuation of this company is $100 million" refers to its total market price. The process of determining that valu...

Introduction to Bootstrapping A common misconception in the entrepreneurial world is that success is inherently tied to attracting venture capital (VC). However, this is largely a myth. While VC-funded companies often receive significant media attention due to...

Launching the "Sharky" Board Game: Key Activities Before diving into negotiations, it's essential to identify the high-level activities required to launch the board game: Market Research: To understand target demographics, game themes, and gameplay mechanics...

Introduction to Bootstrapping A common misconception in the entrepreneurial world is that success is inherently tied to attracting venture capital (VC). However, this is largely a myth. While VC-funded companies often receive significant media attention due to...