Category season file
Equity, fundraising, and founder control decisions.
posts in this decision room
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Investor trust is the metric VCs track silently between updates. What builds it, destroys it, and how the investor trap failure mode happens.
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Pro-rata rights let investors buy shares in future rounds to hold their ownership steady. Here's the math, the super pro-rata variant, and what to negotiate.
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A cap table is the ledger of who owns what percentage of your startup. Here's what it actually tracks, how it changes with every funding round, and the mistakes that quietly cost founders control.
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Seed vs Series A compared: round sizes, what each round proves, the metrics A investors expect, dilution math, and a readiness checklist for the jump.
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Pre-seed vs seed funding compared: typical round sizes, valuations, investor expectations, SAFE vs priced rounds, and a checklist to know which round you're ready for.
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Read how early investment terms affect founder motivation, control, and investor trust in the next round.
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Startup dilution explained with the formula, a three-round worked example, and the option pool trap that costs founders more than they expect.
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50/50 or not? The factors that decide a co-founder equity split, why vesting and a cliff are non-negotiable, and how the split compounds with dilution across rounds.
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How a SAFE works: valuation cap, discount, the post-money vs pre-money difference, and the dilution surprise SAFEs create when they convert at a priced round.
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Pre-money vs. post-money valuation explained with the formula, a worked example, and how investors actually price a Pre-Seed or Seed funding round.
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The option pool shuffle quietly cuts your real valuation before a term sheet is even signed. Here's the math, a worked example, and how to negotiate it.
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How a liquidation preference works: the 1x vs. 2x multiple, participating vs. non-participating terms, and the stack deciding what founders keep at exit.
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A convertible note is startup debt that converts to equity, with interest and a maturity date a SAFE doesn't have. Here's the difference, and when to use each.
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A vesting schedule spreads founder and employee equity over time, with a cliff before any of it is earned. Here's how the standard 4-year, 1-year structure works.
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A down round prices your next raise below your last valuation — and dilutes founders more than the percentage drop suggests. Here's how it works.
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A term sheet sets your valuation, dilution, and board control before the lawyers get involved — here are the clauses that decide the real outcome.