The hottest Startup Financing Substack posts right now

And their main takeaways
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Hidden Trap Of Convertible Note and Liquidation Preference Multiples | Getting First 1000 Customers | Weekend's Reading & More

Venture Curator • 199 implied HN points • 28 Jul 23
💼 Business Venture Capital Startup Financing
  1. Convertible notes can have hidden traps with liquidation preference multiples, impacting founders and investors.
  2. Founders can issue sub-series of preferred stock to protect themselves from inflated liquidation preferences.
  3. Finding the first 1000 customers is challenging, requiring experimentation with different strategies and channels.

Decoding Liquidation Preference, Particiaption & Non-Participation Rights? | YC Startup Index Gives 176% Return | VC Funding Report | Weekend Readings & More

Venture Curator • 199 implied HN points • 07 Jul 23
💰 Finance Startup Financing Venture Capital Investment Trends Remote Jobs
  1. Understanding terms like 1x participation and non-participation is crucial for founders and investors in startup financing to protect their investments.
  2. Having a 1x non-participation liquidation preference can be advantageous for founders during company liquidation to ensure returns.
  3. YC Startup Index shows a remarkable 176% average annual return, surpassing other asset classes and venture capital funds.

Decoding Term Sheet: Liquidation Preference | Particiaption & Non-Participation Rights

Venture Curator • 179 implied HN points • 23 May 23
💼 Business Venture Capital Startup Financing Investments Startups
  1. Understanding terms like liquidation preference, participation, and non-participation rights is crucial for both investors and founders in startup financing.
  2. Liquidation preference refers to the priority investors have in receiving proceeds from the sale of a company.
  3. Non-participation means investors choose between a 1X preference or their stake, while participation involves investors receiving funds through both methods during liquidation.

What SVB really means for climate tech

Climate Money • 78 implied HN points • 29 Mar 23
💰 Finance Capital Markets Climate tech Liquidity Startup Financing Investment Risk
  1. SVB's collapse impacts capital markets, leading to fear and hesitation in committing funds.
  2. Climate tech companies are disproportionately affected by the liquidity crunch due to their capital needs and revenue profiles.
  3. Founders in the climate tech space should be prepared for higher financing risk and seek alternative forms of capital.

Attempting to untangle the messy math behind the "Power Law"

Entry Level Investing • 84 implied HN points • 28 Feb 23
💰 Finance Investing Venture Capital Startup Financing Valuation Business Models
  1. The concept of the 'Power Law' in venture funding states that a few successful investments drive fund returns, not a normal distribution.
  2. Startup valuations are often based on revenue multiples, deviating from traditional valuation methods like free cash flow analysis.
  3. Overvaluation, excessive spending, and failure to grow into valuations can lead to down rounds, hurting startups and investors.
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