In this information-packed webinar, you’ll learn:

Preparing for Fundraising

Jeff Erickson discusses the importance of thorough preparation for startup fundraising. This includes researching and targeting the right investors, understanding their preferences, and making warm introductions. Learn how to create a strong pitch deck that focuses on essential information and aims to secure a second meeting rather than immediate investment.

Building an Effective Pitch Deck

A compelling pitch deck is vital. Jeff highlights the necessity of including financial projections, a clear revenue formula, and a well-organized cap table. Understand how to present key information concisely and effectively to capture investor interest.

Maintaining Momentum with Investors

Jeff emphasizes the importance of maintaining momentum during the startup fundraising process. Utilize cap table management software to keep your financials accurate and up-to-date. Regularly update potential investors with progress reports to stay top of mind and create a sense of urgency.

Financial Models and Data Rooms

Having a solid financial model is crucial for impressing investors. Jeff explains how to tell your startup’s story through numbers, ensuring your startup fundraising is comprehensive and aligns with investor expectations. Maintaining a well-organized data room can instill confidence in investors and streamline the fundraising process.

To learn more about tech startup fundraising, see if you qualify for membership to join Founders Network.

Understanding Venture Finance

Speaking the language of venture finance is essential. Jeff provides insights into understanding venture finance terms, managing your fundraising strategy, and showcasing your business metrics effectively. Learn how to create financial projections that communicate your startup’s potential and prepare for detailed investor discussions.

Balancing Fundraising and Bootstrapping

Jeff discusses the balance between bootstrapping and seeking external investments. Understand when to bootstrap to maintain control and when to raise funds to scale your operations. Learn the importance of validating ideas with minimal funds before pursuing larger investments.

Investor Relationships and Timing

Building relationships with potential investors early on is key to a successful startup fundraising strategy. Jeff shares tips on creating urgency, scheduling meetings, and managing investor expectations. Learn how to leverage warm intros and strategic timing to enhance your fundraising efforts.

About the Speaker

Jeff Erickson leads the Partnerships Team at Forecastr, a leading FP&A software company that helps startups create great financial models to impress investors, confidently raise capital, and run their businesses more effectively. With a background in entrepreneurship and venture finance, Jeff has a proven track record of helping startups achieve explosive growth.

Summary:

“Tech Startup Fundraising: Mastering the Pitch with Financials & Forecasts” is a must-watch for any entrepreneur looking to refine their fundraising strategies. Gain practical insights on preparing for fundraising, building an effective pitch deck, maintaining investor momentum, and understanding venture finance.

Watch now and take the first step towards securing the funding your startup needs to succeed.

For startup founders, navigating this initial stage of building a business can be daunting. Finding the right co-founder, securing your first customers, and obtaining funding are critical steps that can make or break your startup’s success.

This webinar is your roadmap to securing a startup co-founder, attracting customers, and raising capital effectively.

Tooraj Helmi, an experienced entrepreneur, will guide you through the essential strategies for building a strong foundation for your startup. With a wealth of knowledge in the startup ecosystem, Tooraj knows what it takes to achieve early-stage success.

In this information-packed webinar, you’ll learn:

Defining a Founder

Tooraj describes a founder as someone who identifies a common problem and devises a scalable, simple solution. Understanding this fundamental role is the first step in building a successful startup.

Top Three Responsibilities of a Founder

• Excite: Mastering storytelling and pitching to engage stakeholders is crucial. Learn how to create compelling narratives that attract investors and partners.
• Execute: Building a team to turn your vision into reality. Tooraj shares insights on how to recruit and manage a team effectively.
• Excel: Focusing on securing cash and investments. Discover strategies for fundraising and managing finances to ensure your startup’s longevity.

Finding a Startup Co-Founder

Finding the right startup co-founder is about practicality over perfection. Tooraj highlights key characteristics to look for, such as being organized, flexible, having a matching communication style, and possessing proven skills. He also provides strategies to find a co-founder, leveraging networks from previous jobs or academic connections.

Building a Product

Developing a prototype or app requires careful planning and budgeting. Tooraj discusses the critical considerations for building your product, ensuring it meets market needs and is developed efficiently.

Acquiring Customers

The first customer is crucial for any startup development team. Tooraj explains the importance of timing for outreach and how to define and find your ideal customer persona (ICP). Learn creative strategies for customer acquisition, drawing on examples like Airbnb using Craigslist and Zenefits initially selling to HR departments.

To learn more, see if you qualify for membership to join Founders Network.

About the Speaker

Tooraj Helmi is the founder of Apsy Inc., where he leads the creation of AI-driven products transforming software development. With extensive experience in building robust product and engineering teams, and a focus on key performance metrics, Tooraj’s leadership and innovation have propelled Apsy into international markets.

Summary

“Startup Founder Firsts: How to Secure a Co-Founder, Customers, and Cash with Tooraj Helmi,” is a must-watch for any entrepreneur looking to build a strong foundation for their startup. Gain practical strategies to find the right startup co-founder, attract early customers, and secure funding to fuel your startup’s growth.

Watch now and take the first step towards driving your startup’s success.

The data paints a stark picture. Between Q1 2022 and Q1 2023, the number of shutdowns jumped by 124%. And in the most recent quarter, it grew by another 58%. This relentless upward trajectory suggests the startup ecosystem is facing serious headwinds.

It’s important to note that the actual number of shutdowns is likely even higher than the Carta data indicates. Many companies depart the platform without specifying the reason, and it’s reasonable to assume at least some of those were forced closures. Additionally, as the overall number of companies using Carta has grown, the tally of shutdowns has naturally increased.

But even accounting for these factors, the data unmistakably points to a worrying trend. Startup shutdowns are surging at a rate that far outpaces the expansion of the underlying dataset. 

The increasing number of company closures has created a challenging environment for entrepreneurs. In this article, we’ll delve into the factors contributing to this trend, explore strategies for mitigating risks, and offer insights for surviving the current startup downturn.

A Funding Landscape in Flux

So what’s driving this spike in closures? The primary culprit appears to be a dramatic shift in the startup fundraising environment.

After an unprecedented boom in 2021 and early 2022, when venture deal activity reached record highs, the landscape underwent a dramatic reversal. Over the past two years, funding activity has slowed significantly. In Q4 2023, for instance, there were over 1,000 fewer venture deals than in the same period just two years prior.

For startups, this funding crunch has been brutal. The typical interval between new funding rounds is around two to three years. That means many companies that last raised capital in the heady days of 2021 are now finding themselves back on the fundraising trail, only to encounter a far less accommodating investor climate.

When the money runs out and new funding proves elusive, many founders have little choice but to shut down their operations. The startup world can be a ruthless place, and an inability to secure fresh capital often spells the end.

Patterns in the Shutdowns

An analysis of the Carta data reveals some interesting patterns in the types of startups that are succumbing to this funding crisis.

Many of the shuttered companies fall into two key sectors: data infrastructure and software-as-a-service (SaaS). Some are young startups that raised their first funding rounds during the recent market boom, when investors were more willing to take speculative bets. As the climate shifted in 2022 and 2023, these nascent companies were unable to gain traction and find a sustainable footing.

Other shuttered startups are more established players, companies that were born and grew up in a different economic environment. In the heady days of 2020 and 2021, many investors were laser-focused on rapid growth, confident that they could eventually convert those customers into revenue. Today, with the pendulum swinging back toward profitability and early revenue, that equation is no longer adding up for some of these more mature startups.

The funding crunch is also impacting startups across the venture capital spectrum. Between Q1 2023 and Q1 2024, the Carta data shows a 102% increase in seed-stage shutdowns, a 61% rise at Series A, and a staggering 133% jump at Series B. No stage of the startup lifecycle appears immune.

To learn more about the factors behind startup shutdowns, see if you qualify for membership to join Founders Network.

Adapting to a New Reality

It’s important to note that not every struggling startup is doomed to failure. Strategies like cutting costs, pivoting business models, and exploring alternative funding sources have helped some companies weather the storm. But for others, the changes have simply proved too dramatic to overcome.

Perhaps most concerning is the fact that even prior funding doesn’t seem to guarantee protection. Of the 254 companies that shut down on Carta in Q1 2024, 136 had previously raised at least one priced funding round. This was the first time in the past five quarters that shutdowns were more frequent among companies that had raised a priced round than among those that had not.

Strategies for Mitigating Risks

To increase your chances of survival in the current startup environment, consider implementing the following strategies:

• Optimize Your Business Model: Continuously evaluate your business model to ensure it aligns with market trends and customer needs. Be prepared to pivot or adapt as necessary.
• Prioritize Profitability: Focus on achieving profitability as early as possible to reduce your reliance on external funding.
• Build a Strong Network: Cultivate relationships with investors, mentors, and industry experts to gain valuable insights and support.
• Manage Cash Flow Carefully: Monitor your cash flow closely and implement strategies to conserve resources during challenging times.
• Explore Alternative Funding Sources: Consider alternative funding options such as crowdfunding, debt financing, or strategic partnerships.

Even in the face of adversity, there are opportunities for startups to thrive. By adopting a resilient mindset and taking proactive steps, you can navigate the current downturn and emerge stronger.

• Focus on Core Competencies: Double down on your core strengths and leverage your unique value proposition.
• Build a Strong Team: Surround yourself with talented and dedicated individuals who share your vision.
• Embrace Innovation: Continuously seek out new opportunities and be willing to embrace innovative approaches.
• Learn from Failures: View setbacks as learning experiences and use them to improve your business.

Looking Ahead

The message is clear: No startup is immune to the current funding crunch. Whether you’re a freshly minted seed-stage company or a battle-hardened Series B player, the path ahead is treacherous. Founders and investors must be vigilant, nimble, and willing to make tough decisions if they hope to navigate these turbulent waters.

The startup ecosystem has weathered downturns before, but the current situation appears uniquely challenging. As the startup shutdown numbers continue to climb, entrepreneurs must carefully assess their runway, explore every option to shore up funding, and be prepared to make tough choices if the situation becomes untenable.

To learn more about the factors behind startup shutdowns, see if you qualify for membership to join Founders Network.

This guide offers practical, actionable bookkeeping tips for startups, tailored for young startups who need bookkeeping, accounting, and tax filing assistance. From tracking income and expenses to preparing financial statements and seeking professional advice, we’ll cover key areas to ensure your startup’s financial health. This article is Discover how to establish a solid financial foundation and make informed decisions to propel your business forward.

Tip #1: What Are the Key Bookkeeping Basics Every Startup Should Know?

Understanding the Importance of Accurate Financial Records

Accurate financial records are the backbone of your startup. They help you track income and expenses, and provide a clear picture of your startup’s financial health.

Good records are essential for making informed decisions, preparing for tax season, and securing funding. Keep every receipt, invoice, and financial document organized.

This will save you headaches down the line and ensure you’re always ready for any financial scrutiny. Accurate records also help you balance your books and avoid errors in your bookkeeping and accounting.

Setting Up a Chart of Accounts Tailored to Your Startup

A chart of accounts is a list of all your startup’s accounts, including assets, liabilities, income, and expenses. Tailor it to fit your specific startup’s needs. This organization makes it easier to track where your money is coming from and where it’s going, which is essential for managing your finances effectively. Using an accounting system or accounting software can help streamline this process.

Regularly Reconciling Bank Statements

Reconciling your bank statements means comparing your accounting records to your bank account statements to ensure they match. Do this monthly to catch any discrepancies or errors early. It’s a simple yet powerful step to prevent fraud, avoid overdrafts, and ensure your financial records are accurate.

Make it a habit; it only takes a few minutes but can save you from major issues. Regular reconciliation helps maintain the accuracy of your financial statements and supports great bookkeeping practices.

Tip #2: How Can the Right Accounting Software Streamline Your Startup’s Finances?

Choosing the Best Accounting Software for Startups

Choosing the right accounting software can transform how you handle your finances. Look for software that’s user-friendly and suits your business size and type. Popular options like QuickBooks and Xero offer features like invoicing, expense tracking, and financial reporting.

Make sure the software you choose can grow with your business and meet all your bookkeeping needs. The right software helps you manage tasks like data entry, bank reconciliations, and preparing for tax returns efficiently.

Integrating Your Accounting Software with Other Business Tools

Integration is key to streamlining your business operations. Your accounting software should seamlessly connect with other tools you use, like your CRM or project management software. This integration reduces manual data entry, minimizes errors, and ensures your financial data is up-to-date across all platforms.

It saves time and allows you to focus more on growing your business. Integrated systems help you manage tasks like tracking expenses, managing accounts receivable, and generating financial statements.

Leveraging Automation to Save Time and Reduce Errors

Automation in accounting software can handle repetitive tasks like invoicing, expense tracking, and payroll. Set up automated reminders for invoice payments or automatic categorization of expenses. This not only saves you a lot of time but also reduces the risk of human error.

Automation ensures consistency and accuracy in your financial records, making your bookkeeping more efficient and less stressful. Automating tasks helps maintain the accuracy of your journal entries and supports a streamlined approach to managing your business finances.

To learn more bookkeeping tips for startups, see if you qualify for membership to join Founders Network.

Tip #3: What Financial Statements Should Startups Prepare Regularly?

The Role of Income Statements in Tracking Profitability

The income statement, or profit and loss statement, shows your revenue, expenses, and profit over a specific period. It’s vital for understanding how profitable your business is. Regularly reviewing your income statement helps you see where you’re making money and where you might be overspending.

It’s an essential tool for making strategic business decisions and setting financial goals. Accurate income statements help you boost your bottom line and track your business’s financial performance.

Understanding the Balance Sheet for Financial Health

The balance sheet provides a snapshot of your startup’s financial position at a specific point in time. It lists your assets, liabilities, and equity. Understanding your balance sheet helps you gauge your business’s stability and liquidity.

It shows what you own versus what you owe, helping you make informed decisions about investments and financing. Regularly reviewing your balance sheet ensures you have a clear picture of your business’s financial health and helps you safeguard your assets.

Cash Flow Statements: Why They Matter

A cash flow statement tracks the flow of cash in and out of your business. It’s vital for ensuring you have enough cash to cover your expenses. Regularly reviewing your cash flow statement helps you identify patterns in your cash usage, plan for upcoming expenses, and avoid cash shortages.

It’s a critical tool for maintaining the financial health of your startup. Proper cash flow management helps you ensure timely payments and maintain liquidity, which is essential for growing your business.

Tip #4: How Can Startups Manage Expenses and Credit Effectively?

Best Practices for Tracking Startup Expenses

Tracking business expenses is significant for understanding where your money goes and for maximizing your deductions come tax season. Keep all receipts and invoices organized, preferably using accounting software that allows you to categorize and store digital copies.

Regularly update your records and reconcile your accounts to catch any discrepancies early. Using a dedicated business bank account simplifies this process, ensuring your personal and business expenses are clearly separated. Many entrepreneurs find that having a precise and organized bookkeeping system is the best practice for managing their finances.

Managing Business Credit Cards and Loans

Properly managing business credit cards and loans is essential for maintaining good credit and cash flow. Always pay your credit card bills on time to avoid interest charges and late fees.

Keep track of your loan repayment schedules and try to pay more than the minimum when possible to reduce interest over time. Use accounting software to monitor your balances and ensure you don’t exceed your credit limits.

Regular reviews of your credit statements can help you catch any unauthorized transactions early. Opting for professional bookkeeping services can streamline this process and save you money in the long run.

Strategies for Reducing Unnecessary Costs

Cutting unnecessary costs can boost your bottom line and free up resources for growth. Start by reviewing your monthly expenses and identifying any services or subscriptions that aren’t essential.

Negotiate with suppliers for better rates or explore bulk purchasing discounts. Consider outsourcing non-core tasks to reduce overheads. Implementing energy-saving measures and going paperless can also save money.

Regularly review your expense reports to identify further areas for cost-cutting. By putting together a straightforward plan, you’ll be able to manage your company’s finances more efficiently.

Tip #5: Why Is It Vital to Work with a Professional Accountant?

The Benefits of Hiring a Bookkeeping Professional

Hiring a bookkeeping professional can save you time and reduce stress, allowing you to focus on growing your business. A professional bookkeeper ensures your financial records are accurate and up-to-date, helping you make informed decisions.

They can handle complex tasks like payroll, invoicing, and bank reconciliations, and provide valuable insights into your business’s financial health.

This expertise can help you avoid costly mistakes and stay compliant with tax laws. For many startups, opting for professional bookkeeping services is a manageable way to handle their financial needs.

How to Choose the Right Accountant for Your Startup

Choosing the right accountant for your startup involves considering your specific needs and the accountant’s expertise. Look for someone who understands your industry and has experience with businesses of your size. Check their credentials and ask for references.

A good accountant should offer personalized service and be proactive in helping you manage your finances. They should also be familiar with the latest accounting software to streamline your bookkeeping processes. This is vital whether you’re a sole proprietor or have a more complex business structure.

Understanding the Value of Professional Tax Advice

Professional tax advice is invaluable for ensuring you comply with tax laws and maximize your deductions. An accountant can help you navigate the complexities of tax regulations, identify applicable tax credits, and plan strategies to minimize your tax liability.

They can also assist with preparing and filing your tax returns accurately and on time, reducing the risk of audits and penalties. This proactive approach to tax planning can save you money and give you peace of mind. Don’t procrastinate when it comes to taxation; an accounting professional can help you decide the best course of action for your startup.

How can Taxfyle help?

Finding an accountant to manage your startup’s bookkeeping and file its taxes is a big decision. And odds are, you and your staff are already wearing multiple hats to fulfil the diverse set of roles needed to keep your startup running smoothly. Luckily, Taxfyle lets you get professional accounting support without significantly increasing your overhead expenses.

Taxfyle, connects startups with licensed, experienced CPAs or EAs in the US. The professionals using their platform are licensed accountants averaging more than a dozen years of industry experience. That means they can take care of the tedious accounting work while your startup focuses more on growth. 

To learn more bookkeeping tips for startups, see if you qualify for membership to join Founders Network.

Understanding these dynamics is helpful for startups managing their financials. This article explores how to effectively account for equity and fundraising, offering insights and practical advice for entrepreneurs and founders.

What Are the Key Components of Equity Accounting for Startups?

How Do You Record Equity Issuance in Your Books?

Equity issuance is a fundamental part of startup financing, and recording it correctly is essential for preparing financial statements for investors. Here’s how you can do it:

• Common Stock: This reflects the ownership shares issued to you, your co-founders, and early investors. Document the number of shares and the price per share meticulously.
• Preferred Stock: Often issued to venture capitalists, these shares come with special rights and privileges. Ensure you record any terms associated with these shares clearly.
• Additional Paid-In Capital (APIC): This is the excess amount paid by investors over the stock’s par value. Properly recording APIC is vital as it indicates the capital invested by shareholders, which enhances your startup’s financial health.

It’s important to note that some startups have intricate equity structures involving multiple classes of shares, options, warrants, and convertible securities. These instruments require specialized accounting treatment and disclosure.

• Valuation Challenges: Determining the fair value of common and preferred stock, especially in early-stage companies, can be complex and involves various valuation methodologies.
• Accounting Standards: Adherence to relevant accounting standards (e.g., GAAP, IFRS) is crucial for accurate financial reporting.

Ensure each equity issuance is accurately documented, specifying the number of shares, price per share, and any related terms. This meticulous record-keeping is essential for maintaining transparent and up-to-date financial statements.

What Role Does APIC Play in Equity Accounting?

APIC is critical in reflecting the real capital invested by your shareholders above the nominal value of shares. It provides a buffer for your company’s financials and plays a crucial role in:

• Financial Stability: APIC demonstrates investor confidence and boosts your startup’s financial health. Investors rely heavily on this metric to gauge your company’s viability and growth potential.
• Valuation Metrics: APIC influences how potential investors assess your startup’s value. It’s an important part of financial statements that potential equity investors or shareholders will scrutinize during their due diligence process.

Properly accounting for APIC involves recording the excess amount over par value in a separate equity account. This ensures compliance and provides a transparent snapshot of your company’s financial performance.

How Does Venture Capital Fundraising Impact Financial Statements?

What Are the Main Financial Statements Affected by Fundraising?

Fundraising activities impact several primary financial statements, which are integral for presenting your financial health to potential investors:

• Balance Sheet: This statement reflects changes in equity and liabilities, showcasing the capital raised and the obligations taken on. It provides a comprehensive view of your company’s assets, liabilities, and shareholders’ equity.
• Income Statement: This may include expenses related to fundraising activities, such as legal fees or marketing costs. It also shows revenue and net profit or loss, giving a clear picture of your operational efficiency.
• Cash Flow Statement: This statement captures cash inflows from financing activities, which is vital for understanding the liquidity and cash within the company. It helps in analyzing the cash flow, inflow, and outflow, providing a detailed view of how funds are being utilized.

Each fundraising round should be meticulously documented to ensure transparency and accuracy in these financial statements. This practice is essential for maintaining up-to-date and compelling financial records that can attract potential investors.

How Can You Analyze the Impact of Fundraising on Your Financials?

Analyzing the impact of fundraising involves looking at several key areas to make informed decisions:

• Cash Flow Analysis: By evaluating cash inflows and outflows, startups can predict funding requirements, assess the impact of new investments, and demonstrate financial discipline to potential investors. Ultimately, effective cash flow management is essential for a startup’s long-term success.
• Equity Dilution:  When a startup raises capital by issuing new shares, the percentage ownership of current shareholders decreases. This analysis helps determine the extent of dilution, its impact on valuation, and the implications for founders, early investors, and future fundraising rounds. By understanding dilution, startups can make informed decisions about the amount of capital to raise and the terms of the investment.
• Debt vs. Equity: Debt financing involves borrowing money that must be repaid with interest, while equity financing involves selling ownership shares in exchange for capital. This analysis considers factors such as control, ownership dilution, financial obligations, tax implications, and investor expectations. By understanding the trade-offs between debt and equity, startups can make informed decisions about the optimal capital structure to support their growth and financial goals.

Regularly reviewing these aspects provides valuable insights into your financial performance and helps in modeling the growth potential of your startup. It also plays a significant role in evaluating investment opportunities and ensuring the sustainability and viability of your startup.

To learn more about startup bookkeeping, see if you qualify for membership to join Founders Network.

Why Is Financial Transparency Integral for Startups?

How Can You Maintain Transparent Financial Records?

Maintaining transparent financial records is vital for gaining investor confidence and ensuring your startup’s success. Here’s how you can achieve this:

• Accurate Bookkeeping: Regularly update your financial records to reflect all financial transactions accurately. This ensures that your financial data is always current and reliable.
• Detailed Documentation: Keep comprehensive records of all equity transactions and fundraising activities. Documenting the details, including gross amounts and any non-cash transactions, is helpful.
• Compliance with Standards: Adhere to accounting standards and regulatory requirements to produce accurate financial statements. This compliance demonstrates your understanding of the importance of financial transparency and builds credibility.

Transparent records help you calculate your startup’s financial health accurately, showcasing the potential return on equity to investors and lenders. This approach fosters trust and positions your startup as a reliable investment.

How Do Investors Assess Financial Transparency?

Investors assess financial transparency by looking at key indicators and financial metrics:

• Clarity of Financial Statements: Ensure all financial statements are clear and easily understandable. Investors need to quickly grasp your total revenue, gross margin, and other key metrics.
• Consistency in Reporting: Maintain consistent financial reporting over time. Inconsistent records can be a red flag and may deter potential investors.
• Disclosure of Risks and Opportunities: Be upfront about potential risks and growth opportunities. Investors want to know the potential return and any associated risks.

By focusing on the clarity and consistency of your financial data, you can enhance investor confidence, improving your chances of securing the necessary funding.

How Can Founders Optimize Bookkeeping for Fundraising Success?

What Are Best Practices for Managing Equity and Fundraising Records?

To optimize your bookkeeping for fundraising success, implement these best practices:

• Regular Audits: Conduct periodic audits to verify the accuracy of your records. Audits help identify and correct errors, ensuring that your financial data is reliable.
• Advanced Software: Utilize accounting software designed for startups. These tools help manage equity and fundraising records efficiently, allowing you to generate accurate financial statements for fundraising purposes.
• Professional Assistance: Hire accountants or financial advisors with expertise in startup finance. Their guidance can help you navigate complex financial transactions and maintain accurate records.

By following these best practices, you can provide accurate financial data that highlights your startup’s profitability and potential return, making it more attractive to investors.

How Can You Prepare for Investor Meetings?

Preparation is key to securing investment. Here’s how you can get ready:

• Detailed Financial Projections: Present realistic and detailed financial forecasts. Show potential investors your projected total revenue, gross profit, and potential return on equity.
• Clear Equity Structure: Clearly outline your current equity structure and future plans. Investors need to understand how their investment will impact your debt levels and liquidity.
• Transparent Reporting: Provide comprehensive and transparent financial reports. This builds trust and shows that you understand the importance of financial transparency.

Being well-prepared with accurate financial statements and clear projections can significantly improve your chances of securing funding. This preparation demonstrates your commitment to financial transparency and highlights the potential profitability and growth of your startup.

How can Taxfyle help?

Finding an accountant to manage your startup’s bookkeeping and file its taxes is a big decision. And odds are, you and your staff are already wearing multiple hats to fulfil the diverse set of roles needed to keep your startup running smoothly. Luckily, Taxfyle lets you get professional accounting support without significantly increasing your overhead expenses.

fnPartner Taxfyle, connects startups with licensed, experienced CPAs or EAs in the US. The professionals on their platform are licensed accountants averaging more than a dozen years of industry experience. That means they can take care of the tedious accounting work while your startup focuses more on growth. 

Today, you might be cold emailing investors. But tomorrow, you might be raising half a billion dollars with a basic PowerPoint, thanks to your prior success. 

Eric Berry, managing partner at Bedford Bridge, has seen just that happen with his brother. Berry himself sold his company for just under $1.5 billion, a deal that marked one of the most significant cash returns relative to cash raised in the New York tech scene’s history.

What catches Berry’s eye now as an investor? Spoiler alert: it isn’t AI. “I don’t really care about whether it’s AI or not,” says Berry, “I just care about the value it delivers to the customer.”

Meanwhile, Mitchell Harounian, investor associate at Talent Resources, says his interest is piqued when a company solves a problem and has a total addressable market (TAM) of over $10 billion. But more than that, Harounian wants to know what motivates founders and why you’re the perfect person to build your company. 

How do you get in the room or on the call to answer these questions and deliver that presentation to move investors from interested to invested? That’s what you’ll find out below. 

We gathered advice for founders from influential investors who spoke on a panel co-hosted by the Founders Network during New York Tech Week. They revealed their communication preferences for when founders pitch them so that you can make every communication count.

Want more advice for founders? See if you qualify for membership to join Founders Network.

Advice For Founders

Do: Send cold emails (but also do your homework)

To Harounian, cold emails go a long way. And some of the best founders are great at cold emailing — provided you do your homework and ensure it doesn’t look like a mass email. 

Just how far can a cold email go? David Beisel, the co-founder & partner at NextView Ventures, once invested in a company from a cold email. “It was a perfectly tailored email,” explains Beisel. “They knew the companies I invested in, how they fit into that cohesion, and why it was different…And it resonated.” 

Don’t: Be overly defensive toward investors’ questions

A company could be an absolute standout, but if the founder is too resistant or rigid, that’s a major red flag, says Sumeet Shah, founder and managing partner of VHS Ventures. And it’s caused him and his team to pass on investments. However, this doesn’t mean always following feedback, adds Beisel, who notes that retaining confidence in your vision is critical as a founder. However, do listen to and thank investors for feedback.

“Our job as investors is to mitigate risk,” says Shah. “And so I will ask some difficult questions as we go along our due diligence processes.” He seeks founders who carefully consider the questions and provide thoughtful, well-considered responses. 

Do: Network with investors—in and out of your space

When looking for investors, see if you have existing mutual connections. Doug Lessing, who leads the NYC Founders Network’s NYC Chapter, recommends making a list of (20+) VCs in your target market, asking relevant connections if they know someone, and being hyper-specific with requests for introduction.

You can also seek out investors at networking events, inserting yourself in rooms where influential conversations happen. And should you enter one with an investor who is not in your space, don’t lean away. To Shah, if you can create a compelling argument about what your company’s building, they will keep you in the back of their mind. That connection may be fruitful later.

Don’t: Fear the follow-up

Say you have a meeting with an investor, and while the meeting goes well, they (or you) aren’t ready yet. Don’t hesitate to keep that investor updated. 

“Anytime you have a reason to reach out, reach out,” Harounian offers. “When you do, whether it’s closing 10,000 or 100,000, what I’m measuring is how much you’ve done since I first spoke to you.” 

Shah also suggests asking investors what they want to be updated on and whether any specific metrics would be useful to keep in mind as you continue building. 

Remember, too, that people will naturally follow up with you as you grow. And even if you’re still not ready, it’s a powerful message to say you’re not raising (right now) and ask if you could get back to them when you are, suggests Lessing. “But when you are ready, be fully ready,” he adds. 

Do: Bookmark this to read next

With potential money and support on the line, pitching investors can be stressful. Set yourself up for success by protecting yourself from undue stress as you go.

Bookmark this article to discover how successful founders have taken care of their well-being throughout the founder’s journey—so you can, too.

Looking for more advice for founders? See if you qualify for membership to join Founders Network.

What is the Entrepreneurial Operating System?

Gino Wickman developed the Entrepreneurial Operating System, a comprehensive business management system that helps entrepreneurs achieve more from their businesses. It’s a set of simple, practical tools and processes that align and synchronize all the pieces of a business to produce the desired results.

At its core, EOS focuses on six key components:

1. Vision: Clearly defining where your company is going and how it will get there.
2. People: Getting the right people in the right seats.
3. Data: Using a handful of numbers to provide absolute clarity on performance.
4. Issues: Identifying and solving problems quickly and permanently.
5. Process: Systematizing core processes to create consistency and scalability.
6. Traction: Instilling discipline and accountability throughout the organization.

For tech startups, EOS offers a structured approach to tackle common challenges such as rapid growth, evolving product roadmaps, and the need for agile decision-making. It provides a framework to align your team, clarify priorities, and maintain focus on your long-term vision while managing day-to-day operations.

Does the Entrepreneurial Operating System Work?

The short answer is yes, but like any system, its effectiveness depends on proper implementation and commitment. Let’s break down why EOS can be particularly beneficial for tech startups:

1. Clarity and Focus: In the tech world, it’s easy to get distracted by new technologies, market trends, or competitor moves. EOS helps you define your core focus and set clear, achievable goals. By implementing the Vision/Traction Organizer (V/TO), you create a roadmap that keeps everyone aligned and moving in the same direction.
2. Scalable Structure: As your startup grows, maintaining organizational clarity becomes challenging. EOS introduces the Accountability Chart, which clearly defines roles and responsibilities. This structure scales with your company, ensuring that as you add team members, everyone understands their place and purpose.
3. Data-Driven Decision Making: Tech startups thrive on data, and EOS reinforces this with its Scorecard tool. By identifying and tracking key metrics, you can make informed decisions quickly. This aligns well with the agile methodologies often used in tech development.
4. Effective Problem-Solving: The Issues Solving Track (IDS) process in EOS provides a straightforward method for identifying, discussing, and solving problems. This systematic approach can be invaluable when tackling technical challenges or strategic decisions.
5. Consistent Execution: Through its Meeting Pulse structure, EOS establishes a rhythm of regular, focused meetings. This ensures that important discussions happen consistently, progress is tracked, and the team remains aligned – crucial in the fast-paced tech startup environment.
6. Accountability and Traction: The Rocks system in EOS helps break down quarterly goals into actionable items, assigning clear ownership. This creates a culture of accountability, essential for driving progress in a startup setting.

To learn more about EOS, see if you qualify for membership to join Founders Network.

Real-World Impact on Tech Startups

Many tech startups have successfully implemented EOS and seen significant improvements. For instance, a biotech company reported 250% growth within 18 months of implementing EOS. 

A notable example comes from a Saas startup specializing in revenue cycle management software for treatment centers. After implementing EOS, this company experienced remarkable results across various aspects of their business.

Key outcomes reported by this startup include:

• Cultural Transformation: The company underwent a significant culture shift, with notable increases in employee engagement and satisfaction.
• Enhanced Product Development: Their development team delivered improved features, indicating better focus and execution in product innovation.
• Improved Customer Service: The startup saw a marked enhancement in their customer service quality, likely due to better alignment and processes across teams.
• Financial Clarity: They gained a better understanding of their finances and improved their financial tracking capabilities.
• Streamlined Onboarding: The company reported being better prepared for new hires, suggesting clearer role definitions and expectations. 
• Continuous Improvement: EOS became their daily operational framework, facilitating ongoing enhancements across the organization.

However, it’s important to note that EOS is not a magic solution. Its success depends on several factors:

1. Commitment from leadership: The entire leadership team must be on board and committed to the system.
2. Consistent application: EOS tools and processes need to be applied consistently over time to see results.
3. Adaptability: While EOS provides a framework, it should be adapted to fit your startup’s unique culture and needs.
4. Patience: Implementing EOS is a journey, and it may take 18-24 months to fully realize its benefits.

Implementing EOS in Your Tech Startup

Here are some steps to get started with EOS

1. Educate yourself: Read Traction by Gino Wickman to understand the EOS framework fully.
2. Assess your needs: Identify which areas of your business need the most improvement.
3. Start small: Begin with one or two EOS tools that address your most pressing issues.
4. Consider professional help: EOS Implementers can guide you through the process and ensure proper adoption.
5. Commit to the process: Be prepared for the long-term commitment required to see real results.

In conclusion, the Entrepreneurial Operating System can be a powerful tool for tech startup founders looking to bring structure, focus, and scalability to their organizations. While it requires dedication and consistent effort, the potential benefits in terms of clarity, alignment, and execution make it worth considering for any growing tech startup.

Remember, the goal of EOS is not just to implement a system, but to transform how you run your business. By providing a clear framework for vision, execution, and problem-solving, EOS can help your tech startup navigate the challenges of rapid growth and intense competition, setting you on a path to sustainable success.

To learn more about EOS, see if you qualify for membership to join Founders Network.

At the start of the third quarter of 2024, the startup funding landscape presents a complex picture of recovery, innovation, and shifting priorities. While the overall venture ecosystem shows signs of improvement from its 2023 lows, the recovery is far from uniform across sectors and stages. Let’s explore the key trends and insights that are shaping the current state of startup funding.

A Cautious Recovery

Key takeaway for founders: While total VC investment is up, competition for funds remains fierce.

Initial data from Q2 2024 shows a modest increase in median valuations and round sizes across the U.S. venture ecosystem. According to PitchBook and the National Venture Capital Association, startup funding has significantly increased compared to both the previous quarter and Q2 2023.

However, fewer startups are receiving funding, indicating a more selective investment environment. As a founder, this means you need to ensure your pitch and business model are rock-solid to stand out in the competitive 2024 VC investment landscape.

AI’s Dominance

The most striking feature of the Q2 2024 funding landscape is the dominance of artificial intelligence. AI-focused startups pulled in a staggering $16.8 billion in the second quarter alone, accounting for a significant portion of overall investment.

Notable examples include:

• Elon Musk’s xAI: $6 billion Series B
• CoreWeave (AI cloud infrastructure): $1.1 billion Series C
• Scale AI (data labeling): $1 billion+ round

If your startup isn’t directly in the AI space, consider how you can integrate AI technologies into your product or service. This could significantly boost your appeal to investors in the current VC investment landscape.

Trends in the 2024 VC Investment Landscape

While overall investment in startups rose in Q2 2024 compared to the previous quarter and the same period last year, a deeper dive reveals a varied funding landscape across different stages, sectors and geographies. 

Approximately 77% of large deal value went to companies in the four top VC hubs: San Francisco, New York City, Los Angeles, and Boston. More surprisingly, these hubs also secured a slight majority of early-stage dollars, which typically tend to be more geographically dispersed. If you’re not in these areas, consider how you can tap into these networks or potentially relocate for better funding opportunities in the 2024 VC investment landscape. This concentration appears to be driven by the AI boom, with entrepreneurial ecosystems in these tech hubs particularly well-positioned to capitalize on the trend.

While AI continues to attract massive investments, other sectors are experiencing a more subdued recovery or even continued decline. Enterprise software, consumer products, and fintech, once darlings of the venture capital world, are seeing muted investment activity. Other hot sectors include cloud infrastructure and cybersecurity.

Stage-Specific

Here’s a breakdown of the key trends for early, late, and seed-stage funding:

Early Stage:

• $22 billion invested in Q2 (60% increase from Q1)
• Opportunities for substantial funding, but high competition

Late Stage:

• $19.4 billion invested (11% increase from Q1)
• Fewer but larger deals

Seed Stage:

• $3.9 billion invested (8% increase from Q1)
• Relatively stable, good opportunities for early-stage founders

Exit Strategies: IPOs and M&As 

While Q2 didn’t produce many high-profile exits for venture-backed companies, there were a few notable acquisitions and IPOs.

Notable exits in Q2 2024:

• Rubrik (data security): $752 million IPO, $5.6 billion valuation
• Tempus (AI in precision medicine): $410 million IPO
• AuditBoard: $3 billion acquisition by Hg
• EyeBio: Up to $3 billion acquisition by Merck

To learn more about the 2024 VC investment landscape, see if you qualify for membership to join Founders Network.

Challenges in the 2024 VC Investment Landscape

While there are positive signs for overall investment in Q2 2024, a closer look exposes some underlying challenges in the venture capital ecosystem. These challenges raise concerns about inclusivity, market stability, and potential overenthusiasm for specific sectors. Let’s explore some of the key issues facing startups and VCs:

1. Female-founded startup funding has declined significantly, both in terms of dollars and deal count, compared to last year and its 2021 peak.
2. The number of completed deals, particularly in the late stage, has decreased to the lowest total in years, despite increased funding amounts.
3. Many sectors outside of AI continue to struggle, raising concerns about a potential overreliance on a single technology trend.
4. There remains a large backlog of mature, heavily-funded private companies that have yet to produce an exit, potentially creating future market pressures.

Navigating the 2024 VC Investment Landscape as a Founder

As we move into the second half of 2024, the startup funding landscape presents both opportunities and challenges. The AI sector continues to attract massive investments, driving overall funding numbers up. However, the concentration of capital in fewer deals and the geographic consolidation of funding raise questions about the breadth and sustainability of the current recovery.

For entrepreneurs and investors alike, navigating this landscape will require a nuanced understanding of sector-specific trends, a keen eye for truly innovative technologies, and perhaps most importantly, the ability to look beyond the AI hype to identify overlooked opportunities in other sectors.

As you build and grow your startup in 2024, keep these key points in mind:

1. Optimize your pitch for a more selective investment environment
2. Explore AI integration opportunities for your product or service
3. Tailor your fundraising strategy to your startup’s stage and sector
4. Consider your geographic strategy for better funding opportunities
5. Stay agile and ready to adapt to evolving investor preferences

As the venture ecosystem continues to evolve, one thing remains clear: adaptability and strategic foresight will be key to success in this dynamic and often unpredictable funding environment. Remember, while trends are important, a great idea executed well will always attract investor attention.

To learn more about the 2024 VC investment landscape, see if you qualify for membership to join Founders Network.

Where’s the Money Going?

Investors are pouring funds into several key areas within robotics. For example, workplace robots addressing labor shortages and automating tasks like delivery and material handling are a major recipient. We’re also seeing significant investment in surgical robotics, with startups developing technologies for minimally invasive procedures. The rise of humanoid robots, with the potential to revolutionize various industries, is another area attracting considerable capital. This targeted funding across diverse robotics segments highlights the vast potential for innovation and disruption within the industry.

Workplace Robotics

Workplace robotics continues to be a major recipient of funding, with startups developing solutions to address labor shortages and automate tasks like delivery, material handling, and weed removal.

• Bright Machines (San Francisco): This leader in factory automation secured $126 million in combined Series C funding and debt financing, led by BlackRock. Their technology streamlines factory workflows and optimizes production processes.
• Collaborative Robotics (Silicon Valley): Focused on collaborative robots (cobots) that work alongside humans, the company secured a $100 million Series B round led by General Catalyst. Cobots are poised to play a significant role in the future of manufacturing, fostering a more collaborative and efficient human-robot work environment.
• Carbon Robotics (Seattle): Developer of AI-powered weeding robots, Carbon Robotics has raised a total of $85 million, with its latest funding round coming in a May Series C. Their robots offer a sustainable solution for weed control, reducing reliance on herbicides and addressing labor shortages in the agricultural sector.
• Bear Robotics (Redwood City, California): This company designs mobile robots for various applications, including hospitality, assisted living, and warehouse operations. They recently closed a $60 million round led by LG Electronics. Mobile robots offer immense potential to streamline logistics and automate tasks across diverse industries.

Humanoid Robots

Investment is also flowing into startups developing humanoid robots, a concept long relegated to science fiction.

• Figure (Sunnyvale, California): This self-described “AI robotics company” developing a general-purpose humanoid robot attracted significant interest, securing a whopping $675 million in a February Series B round. Backers include tech giants Nvidia, Microsoft, and Amazon. Figure’s ambitious vision for humanoids has the potential to reshape our understanding of human-robot interaction.
• 1X (Norway & Silicon Valley): This international startup raised $98 million in January to advance its line of humanoid robots, including the human-like NEO and the wheeled EVE. 1X believes the humanoid form factor is ideal for integrating advanced AI with the physical world. Ultimately, the company envisions these robots working in agriculture, construction, and healthcare, with a focus on hazardous and repetitive tasks.

Surgical Robotics

Surgical robotics remains a hotbed for investment, with startups developing technologies to improve minimally invasive procedures.

• Medical Microinstruments (Jacksonville, Florida): This developer of robotic-assisted microsurgery technology secured $110 million in a February Series C round led by Fidelity. Their technology aims to replicate human hand movements at a micro scale, expanding treatment options for soft tissue surgery. Advancements in surgical robotics have the potential to revolutionize healthcare by enabling minimally invasive procedures with improved precision and outcomes.
• Ronovo Surgical (Shanghai): Focused on robotic-assisted laparoscopy, Ronovo Surgical recently closed a $44 million Series B funding round. Laparoscopic surgery offers numerous benefits for patients, including shorter recovery times and reduced pain. Robotic assistance can further enhance the precision and safety of these procedures.

To learn more about robotics startups, see if you qualify for membership to join Founders Network.

A Golden Age for Robotics Startups

The robotics industry is experiencing a gold rush, with funding surging in 2024. This surge is fueled by the confluence of a booming AI sector and a growing demand for automation solutions. Moreover, investors are hungry for innovation at the intersection of these fields, presenting a golden opportunity for robotics startups.

The landscape is ripe for disruption across various sectors. Workplace robots offer solutions to labor shortages and streamline production processes. In the healthcare field, surgical robotics advancements promise to revolutionize procedures. Similarly, humanoid robots, once relegated to science fiction, are now attracting significant investment.

For startup founders, the time is now to capitalize on this momentum. Investors are eager to back well-defined visions that leverage AI and address critical needs. Therefore, startups should focus on developing robots that are not only capable but also scalable and cost-effective. This will ensure long-term adoption and position them for success in the current market.

This is a pivotal moment for the robotics industry. By seizing the current opportunity, both startups and investors can play a key role in shaping the future of human-robot collaboration and ushering in a new era of innovation and progress.

To learn more about robotics startups, see if you qualify for membership to join Founders Network.

Why? Because a technical co-founder brings not just the coding skills to build your product, but also the technical expertise to navigate complex challenges, stay ahead of the curve, and ensure your product is actually feasible. Investors often seek ventures with a strong understanding of the product’s development and a clear roadmap for building it. A team with diverse expertise demonstrates a higher level of preparedness and potential for success.

This blog dives deep into everything you need to know about finding the perfect technical co-founder for your tech startup. We’ll explore the key qualities to look for, where to find them, and how to convince them to join your mission.

Why You Need a Technical Co-Founder

While some solo founders achieve success with bootstrapped MVPs (Minimum Viable Products), for most tech startups, a technical co-founder is a non-negotiable asset. Here’s why:

• Building the Product: You might have the vision, but building a robust tech product requires expertise. A technical co-founder translates your vision into a functional and scalable platform.
• Technical Leadership: They navigate the ever-evolving tech landscape, ensuring your product leverages the latest advancements. They hire and manage development teams, fostering a culture of innovation.
• Shared Vision & Ownership: A co-founder is invested in the company’s success as much as you are. This shared ownership fosters a strong work ethic and drives the company forward.

Qualities of the Ideal Technical Co-Founder

Finding the right technical co-founder is akin to finding your entrepreneurial soulmate. Here are the qualities to prioritize:

• Technical Expertise: This is a given. They should possess the specific skillset required to build your product. Look for experience with relevant programming languages, frameworks, and technologies.
• Problem-Solving Skills: The tech world is full of roadblocks. Your co-founder should be a resourceful troubleshooter who can devise ingenious solutions under pressure.
• Communication & Collaboration: They should clearly articulate technical concepts to non-technical folks like you. Collaboration is key, so ensure they value teamwork and open communication.
• Business Acumen: While coding prowess is essential, an understanding of the business side is crucial. Look for someone who grasps market dynamics, competitor analysis, and funding strategies.
• Cultural Fit & Shared Values: You’ll be spending countless hours together. Shared values like work ethic, transparency, and a passion for your mission will ensure a harmonious and productive partnership.

The Technical Skills Landscape: Matching Needs with Expertise

The specific technical skills you require will vary depending on your product. Here’s a breakdown of some common skillsets needed for different types of tech startups:

• Web & Mobile Development: Full-stack developers with expertise in languages like Python, Javascript (React, Node.js), and frameworks like Django or Spring.
• Machine Learning & AI: Individuals with a background in data science, machine learning algorithms, and deep learning frameworks like TensorFlow or PyTorch.
• Blockchain & Crypto: Developers with experience in blockchain technologies, smart contracts, and popular crypto platforms like Ethereum or Solana.
• Hardware & Internet of Things (IoT): Engineers with expertise in embedded systems, microcontroller programming, and hardware integration with software applications.

Want to find a technical co-founder? See if you qualify for membership to join Founders Network.

Attracting Top Technical Talent

The best technical co-founders are often in high demand. Here are some strategies to get their attention:

• Build a Strong Online Presence: Showcase your vision, business plan, and team on your website and social media profiles. Highlight the potential for impact and the exciting challenges they’ll face.
• Network at Tech Events & Conferences: These events are fertile ground for connecting with talented developers. Attend talks, participate in discussions, and make genuine connections.
• Leverage Online Communities: Tech communities like Founders Network act as matchmaking platforms for startups and technical talent. You can post detailed profiles outlining your vision and specific technical needs, attracting potential co-founders who can help bring your idea to life.
• Offer Competitive Equity & Compensation: Be prepared to offer a stake in the company that reflects their contribution. Competitive salaries and benefits packages also go a long way in attracting top talent.
• Focus on the “Why”: Don’t just sell the role; sell the mission. Highlight the potential for meaningful innovation and the opportunity to revolutionize an industry.

Alternatives to a Technical Co-Founder

Finding the perfect technical co-founder can be a lengthy process. Here are some alternatives to consider:

• Hiring a CTO (Chief Technology Officer): A CTO brings experience and leadership to the table, but may not offer the same level of ownership and passion as a co-founder.
• Freelance Developers/Development Teams: This option provides flexibility and scales with your needs. However, managing multiple developers can be challenging, and long-term vision might be compromised.
• Tech Incubators/Accelerators: These programs offer mentorship, resources, and a network of potential co-founders who share your entrepreneurial spirit.

Find Your Tech Partner

 The vast majority of successful tech startups have at least one technical co-founder on board. That’s because your idea, no matter how brilliant, is just that – an idea.  To translate that vision into a tangible product and navigate the ever-evolving tech landscape, you need a skilled technical co-founder by your side.

Finding the right technical co-founder is a pivotal step in launching a successful tech startup. By understanding their importance, identifying the ideal qualities, and implementing effective search strategies, you can increase your chances of building a formidable partnership. Remember, the perfect co-founder complements your skillset, shares your vision, and is equally passionate about the journey. You’ll need a co-founder who possesses the same level of dedication, resilience, and excitement to navigate the inevitable challenges and celebrate the victories together. With the right technical co-founder by your side, you’ll be well on your way to turning your innovative idea into a game-changing tech company.

Want to find a technical co-founder? See if you qualify for membership to join Founders Network.