Articles on Startup Finance

This article explains the concept of seed funding. It provides a list of the various sources which provide seed funding. It also guides the user about how much seed funding should be raised.

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This article explains the difficulties faced by entrepreneurs when they try to raise seed funding. It explains the various reasons why obtaining seed funding is difficult. It also explains the concept of traction as well as why it is important for entrepreneurs looking to obtain seed funding.

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This article provides details about the various types of documents that are required when a startup company comes into existence. It also provides details about why some of these documents may be considered important for investors.

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This article explains why the distribution of equity amongst startup co-founders is an important issue. It also explains the problems which are commonly faced while splitting up this equity. The mechanism which can be used to allocate equity in a more amicable manner has also been discussed in this article.

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This article explains the main concept of a proof of concept. It also explains the various types of proof of concept. The benefits which are commonly derived from this activity have also been detailed in this article.

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This article explains the concept of the minimum viable product approach. It also explains the various advantages as well as disadvantages of using this approach.

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This article explains the concept of prototyping. It explains the various types of prototyping that are commonly used in the industry. It also explains the various financial benefits of using the prototyping technique.

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This article explains the concept of an asset-light business model. It also provides a detailed explanation of the characteristic features which distinguish an asset-light business model from a regular asset-heavy business model.

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This article explains the advantages of asset-light business models. The financial benefits which accrue to business owners as well as investors because of this model have been explained in detail in this article.

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This article explains the concept of cash burn rates. It explains the paradigm shift in the thought process which has been witnessed by investors and entrepreneurs over the ages. It also explains how the cash burn rate has now become a regular occurrence in a startup funding scenario.

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This article explains how the cash burn rate of any organization needs to be monitored. It answers some fundamental questions such as why the cash burn rate is important and what is the ideal burn rate. It also explains why reducing the burn rate of a company is not a viable business strategy.

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This article explains the concept of a term sheet. It explains why a term sheet is important. It also provides certain tips which can be followed during the negotiation stage.

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This article explains how founders must evaluate term sheets that are offered to them by investors. It lists down in detail about the various common red flags that investors must be on the lookout for. It also explains how these terms work and why they can work against the interest of the entrepreneur.

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This article explains the various costs associated with raising funds for startup companies. The details of various types of costs as well as the manner in which they affect the bottom line have been explained in this article.

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This article explains the concepts related to the valuation of early-stage startups. It explains how there is no permanent mechanism to value these companies. It also explains how one can read the investor mindset in order to appeal to them while making the investment pitch.

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This article explains the concept of pre-money as well as post-money valuation. It explains how the two concepts are closely interlinked. It also explains the critical difference between these concepts.

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This article explains the various complex scenarios which arise during the valuation of a startup. It lists the common grey areas to which founders, as well as investors, struggle to assign a monetary value.

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This article explains the methods commonly used in valuing pre-revenue companies. The details of the commonly used methods as well as their pros and cons have been explained in this article.

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This article explains the concept of valuation divergence. It answers important questions such as why does valuation divergence occurs. It also explains why understanding this concept is important and whether it can be prevented.

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This article explains the concept of option pools. It explains how option pools are funded and how they work. It also explains the advantages of using option pools for any startup company.

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This article explains the concept of cap tables in start-up companies. It explains why cap tables are important. It also explains the details which needs to be present in a cap table.

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This article explains the concept of stock sale vs asset sale. It explains the difference between the two. It also explains why asset sale is more advantageous to the buyers whereas a stock sale is more advantageous to the seller.

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This article explains the concept of a financial model. It explains the two types of financial models which are commonly prepared. The various advantages of having a financial model have also been explained in this article.

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This article explains the concept of key performance indicators. It also explains how key performance indicators have a huge influence on the valuation which is likely to be provided to a startup firm.

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This article explains the concept of restricted stock options. It explains the difference between normal stock options and restricted stock options. It also explains the advantages and disadvantages of using restricted stock options.

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This article explains the concept of incubators. It explains how investors benefit from being associated with an incubator network. It also explains the various advantages which accrue to an entrepreneur when they set up their startup organization within an incubator network.

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This article explains the concept of unicorn companies. It explains what unicorn companies are. It also tries to answer the questions which are commonly raised about the high valuations which are accorded to these unicorn companies.

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This article explains why startup companies are deciding to stay private. It mentions some statistics about the number of companies staying private. It also explains some of the common benefits that companies derive by staying privately funded instead of being publically listed on a stock exchange.

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This article explains the reasons behind the failure of unicorn companies. It also explains the typical symptoms which can be considered to be leading indicators of business failures in unicorn companies.

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This article explains the challenges faced by a startup firm while hiring its employees. It also explains some of the creative ways which have been used by startup companies to hire despite being on a tight budget.

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This article explains the disadvantages of bootstrapping. It also explains some of the common issues related to bootstrapping and how investors can need to take such issues into account before making a final decision.

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This article explains the concept of revenue-based financing. It also explains the advantages and disadvantages which are commonly associated with revenue-based financing.

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This article explains the concept of convertible notes. It explains the various features and workings of convertible notes. It also explains the reasons which prompt founders to issue convertible notes and investors to buy them.

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This article explains the concept of convertible notes. It also lists the various pros and cons of using convertible notes to finance a startup firm. A comparative analysis of the pros and cons has been conducted in this article.

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This article introduces the concept of Simple agreement for future equity (SAFE). It explains how the SAFE instrument is different as compared to convertible notes. It provides extensive details about the features, pros, and cons of SAFE instruments.

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This article explains the concept of Keep it Simple Securities (KISS). It explains the reason behind the evolution of the convertible note to Keep it Simple Securities (KISS). It also helps the reader clearly understand the distinction between KISS securities, SAFE securities, and convertible notes.

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This article explains the concept of “Series A” funding. It also explains how Series A funding is different as compared to seed funding and pre-seed funding. The objectives of - Series A funding have also been explained in this article.

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This article explains the concept of Series B funding. It explains how Series B funding is different as compared to other funding rounds. It also explains the difficulties faced by entrepreneurs as well as the steps which they should take when they raise Series B funding.

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This article explains the concept of Series C funding. It also explains how Series C funding is different from other forms of funding.

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This article explains the concept of venture debt. The article clearly explains the difference between venture equity and venture debt. It also explains the terms and conditions commonly associated with venture debt.

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This article explains the pros and cons associated with venture debt. A list of the relevant pros and cons along with a detailed explanation of their effect on the start-up firm has been included in this article.

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This article explains the concept of scalability. It also explains the drivers which can be used to make a business more scalable. A list of the drivers along with details of how they impact the business has been provided in this article.

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This article explains the pros and cons which are commonly associated with having a scalable business model. The impact of the pros and cons has been detailed so that the investors and founders can make an informed choice.

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This article explains the concept of arbitration. It also explains why arbitration is important for start-up companies. The common benefits of arbitration have been listed in this article.

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This article explains the concept of the revenue model. It explains why revenue models are so critical for any start-up company. It also provides details about the various forms of revenue models.

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This article explains why investors often encourage start-up founders to have an excessive burn rate. It also explains why start-up founders need to be very careful while managing their cash flow position in the early stages of the life of the business.

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This article explains the common parameters which investors pay attention to when they are evaluating a start-up. It also explains how founders can use these same parameters to evaluate themselves and how this will help them in obtaining a better valuation from the customers.

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This article explains the various rules and regulations which affect start-up companies. Details regarding various regulations as well as their impact on the operations of the start-up have been detailed in this article.

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This article explains the concept of accelerators. It also explains how accelerators are different from incubators. The benefits of enrolling with an accelerator have also been explained in this article.

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This article explains the concept of an operational plan. It explains how metrics can be used to define an operational plan. The concept of primary and secondary key performance indicators has been explained. The article also explains how the objective and key results philosophy can be applied by any start-up.

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This article explains the various types of investors who commonly invest in a start-up company. It also tries to explain the motivation that each investor type has behind investing in the start-up.

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This article explains the concept of the founder’s dilemma. It explains how founders are often forced to choose between wealth and control. The personality traits of investors have also been discussed in this article.

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This article explains the concept of social media marketing and its impact on the investment process. It also explains how social media performance is used by investors as a barometer to gauge the overall performance of the start-up company.

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This article explains how public relations activities impact start-up enterprises. It explains the various benefits of running a public relations campaign. It also mentions a couple of best practices that are followed in this campaign.

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This article explains the various red flags which discourage investors from investing in a start-up company. The specific red flags and the manner in which they impact the business have been explained in great detail.

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This article explains the concept of acqui-hire. It also explains the process with which acqui-hire works. The pros and cons of this model have also been described in detail in the article.

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This article explains how start-up companies are built keeping in mind that they will be acquired at a later stage. The steps followed by entrepreneurs while building such a company have been explained in this article.

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This article explains the concept of the Product as a Service (PaaS) business model. It explains what a Product as a Service (PaaS) business model is. It also explains the steps which need to be taken by a company to transition from a traditional manufacturing model to this model.

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This article explains the various benefits of the Product as a Service (PaaS) business model. The details of the benefits enjoyed by the producer as well as the consumer have been explained in detail in this article.

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This article explains the concept of various revenue streams which a co-working space has to offer. The details of these various revenue streams which comprise the overall revenue model have been explained in this article.

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This article explains the concept of the peer-to-peer business model. It explains how the revenue model works for such companies. It also explains the advantages and disadvantages of peer-to-peer-based companies.

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This article explains the business model of Instacart. It explains the journey of Instacart from a small start-up company in 2014, to the global behemoth that it has become today.

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This article provides information about the business model of Goodleap. It explains the various innovative strategies which Goodleap uses which have helped it become one of the most successful unicorns in the world.

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This article explains the business model of Twitter. It explains the value proposition which Twitter offers to its users. It also explains the two main sources of revenue with Twitter uses to run the company.

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This article explains the business model of Tesla corporation. It explains why Tesla is one of the most highly valued companies in the world. It also explains how Tesla has approached the same automobile business in a different manner in order to build its empire.

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This article explains the business model of Epic Games. It explains how Epic Games adds value to users and why it is extremely popular. It also explains the various revenue streams which Epic Games has created in order to monetize its business.

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This article explains the business model of SpaceX. It explains what SpaceX does. It also explains the various revenue streams which SpaceX uses in order to make itself an economically viable enterprise.

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This article discusses the rise of Stripe. It explains how Stripe has grown from a small start-up company to a $100 billion behemoth that is now considered to be one of the most valuable start-ups in the world.

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