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. 

Bootstrapping involves relying on your own resources, like personal savings, revenue, or loans from friends and family, to build your startup.  Fundraising, on the other hand, involves securing capital from external sources like angel investors, venture capitalists (VCs), or crowdfunding platforms. Each approach has its own set of advantages and disadvantages, and the ideal path depends on your specific startup and goals.

The Bootstrapper’s Path: Independence and Resourcefulness

Bootstrapping fosters a culture of self-reliance and resourcefulness. You have complete control over your company’s direction and decision-making. There’s no pressure to meet investor expectations or deliver hyper-growth.  Here are some key benefits of bootstrapping:

• Maintain Control: You are the captain of the ship. Every decision, from product development to marketing strategy, rests with you. This allows for greater agility and the freedom to adapt quickly to changing market conditions.
• Profitable Growth: Bootstrapped businesses are inherently profit-focused. Every dollar spent needs to deliver a return, leading to a more lean and efficient operation.
• Validation Through Sales: Bootstrapping forces you to validate your business concept with real customers and revenue. This early market feedback is invaluable for iterating and refining your product or service.

However, bootstrapping also comes with challenges:

• Limited Capital: Your growth will likely be slower due to restricted resources. Hiring top talent, scaling marketing efforts, or investing in research and development might be difficult.
• Limited Network: Bootstrapped founders might lack access to the valuable networks and mentorship often available to VC-backed ventures.
• Longer Timeline: Building a successful business takes time, especially without a significant cash injection. Be prepared for a longer runway to achieve your goals.

The Fundraising Route:  Fueling Growth and Expertise

Fundraising offers access to significant capital, which can accelerate your startup’s growth trajectory.  External investors also bring valuable expertise, networks, and mentorship to the table. Here’s what fundraising can offer:

• Rapid Growth: With a hefty cash infusion, you can hire a strong team, invest in marketing and sales, and quickly scale your product or service.
• Network and Expertise: VCs and angel investors often have extensive industry experience and connections. They can provide invaluable guidance and open doors to potential customers and partners.
• Validation: Securing funding can be a strong signal of your startup’s potential, attracting top talent and boosting customer confidence.

Despite its allure, fundraising comes with its own set of considerations:

• Loss of Control: Investors will expect a return on their investment, which may involve giving up equity, board seats, and some decision-making power.
• Pressure to Perform: VCs often have specific growth expectations for their portfolio companies. This pressure can lead to a focus on short-term gains over long-term vision.
• Dilution of Ownership: The more you raise, the more equity you give up. This can significantly reduce your ownership stake in the company you built.

A Hybrid Approach: The Best of Both Worlds

Many successful startups have taken a hybrid approach, combining elements of bootstrapping and fundraising.  You can start by bootstrapping to validate your idea and gain initial traction.  Once you have a proven concept and demonstrable revenue, you can then seek funding to accelerate growth.

• Validate Your Idea with Limited Risk: Bootstrapping your initial phase allows you to test your concept with a minimal investment. You can gather customer feedback, refine your product or service, and build a strong foundation before seeking external funding.
• Demonstrate Traction and Build Credibility: By achieving initial traction through bootstrapping, you create a more compelling case for investors. Having demonstrable customer interest and revenue growth makes your startup a more attractive investment opportunity.
• Fuel Growth While Maintaining Control: Fundraising allows you to scale your business rapidly without sacrificing complete autonomy. By carefully selecting investors who align with your vision, you can maintain a significant degree of control over decision-making.

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

Choosing the Right Path: A Framework for Decision-Making

There’s no one-size-fits-all answer to the bootstrapping vs. fundraising debate.  Several factors should be considered when making this crucial decision:

• Industry and Business Model: Some industries, like technology or pharmaceuticals, often rely on large upfront investments. Here, fundraising might be necessary. Bootstrapping might be more feasible for service-based businesses or those with lower initial costs.
• Your Team’s Skills and Experience: Does your team have the necessary expertise to navigate the complexities of fundraising? If not, bootstrapping might be a better option until you gain traction and build a stronger case for investors.
• Your Risk Tolerance: Are you comfortable giving up some control and potentially facing pressure from investors? Bootstrapping allows you to maintain control but requires patience and a higher tolerance for risk.
• Your Growth Goals: Do you envision explosive growth or a more sustainable, organic trajectory? Fundraising is ideal for scaling quickly, while bootstrapping fosters a more measured approach.

Real-World Examples: Learning from Success Stories

• Bootstrapping Success Stories: Mailchimp, the email marketing platform, is a prime example of a bootstrapped success story. They achieved profitability early and grew organically through customer referrals and word-of-mouth marketing.
• Fundraising Success Stories: Airbnb, the hospitality marketplace, is a well-known example of a company that leveraged fundraising to achieve explosive growth. VC funding allowed them to scale their platform rapidly and disrupt the traditional hotel industry.
• Hybrid Success Stories: Slack, the popular workplace communication platform initially bootstrapped by offering a freemium model. They gained significant user traction and then secured funding to expand their product features and enter the enterprise market.

Bootstrapping vs. Fundraising: A Journey, Not a Destination

The choice between bootstrapping and fundraising is not a permanent one.  Your approach can evolve as your business grows and your needs change.

The most important factor is to choose the path that aligns best with your goals, resources, and risk tolerance.  Remember, the journey of building a successful startup is filled with challenges and decisions.  By carefully considering all the options and making informed choices, you can increase your chances of achieving entrepreneurial success.

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

To learn more about 2023 startup funding trends, see if you qualify for membership to join Founders Network.

The startup landscape has undergone a remarkable transformation in 2023, characterized by a significant slowdown in global venture capital funding. Total funding in the U.S. plummeted by 42% compared to 2022. This was caused by a multitude of factors, including lingering economic uncertainty, rising interest rates, and geopolitical tensions surrounding the war in Ukraine. This decline has undoubtedly impacted the startup ecosystem, prompting entrepreneurs and investors to reassess their strategies and adapt to the changing dynamics.

Despite the overall downturn, pockets of resilience and innovation emerged. Climate tech startups continued to garner substantial investment. Investors are increasingly recognizing the urgency of addressing climate change and the potential of innovative solutions to mitigate its effects. Additionally, startups harnessing technology to revolutionize healthcare and education attracted growing interest. 

In this blog, we’ll look at 2023 startup funding trends so far this year and strategies for thriving in the current climate. 

We will explore how increased scrutiny of valuations, the rise of alternative funding sources, and the importance of AI and fintech are all influencing the way startups secure funding. We will also examine the challenges and opportunities presented by these trends, and provide practical advice for startups.

Key Trends Shaping the 2023 Startup Funding Landscape

In the face of a shifting financial landscape, several key trends have emerged, shaping the trajectory of startup funding in 2023.

Micro-VC funds, which typically invest smaller amounts of money than traditional VC funds, have emerged as a significant force in the funding landscape, particularly for early-stage startups. This trend reflects a shift towards democratizing access to capital and supporting a broader range of innovative ventures.

Additionally, investors are increasingly recognizing the importance of diversity and inclusion in the startup ecosystem, leading to more investment in female-founded startups, startups founded by entrepreneurs from underrepresented backgrounds, and startups addressing social and environmental issues.

While software and fintech continue to dominte in terms of securing funding, other sectors moved up the ranks to take a larger portion of 2023 startup funding.

Climate Tech Ascends

Investment in climate tech startups reached an high of $7.6 billion in the third quarter of 2023, surpassing previous records and signaling a growing recognition of the need for innovative solutions to address the climate crisis. This surge stems from the mounting threat of climate change, coupled with the growing availability of government funding and support, as well as increasing investor appetite for environmentally conscious ventures.

Climate tech startups are tackling a wide range of challenges, from developing renewable energy sources to improving energy efficiency, fostering sustainable food production methods, and advancing carbon capture and storage technologies. These innovative solutions hold the potential to mitigate the effects of climate change and transition towards a more sustainable future.

Healthcare Innovation Takes Center Stage

Startups leveraging technology to transform healthcare continued to attract significant investment in 2023, with total funding reaching $28 billion. This trend is driven by factors such as the aging population, the rising cost of healthcare, and the increasing demand for personalized medicine.

Technology is enabling startups to develop innovative solutions for disease prevention, diagnosis, treatment, and monitoring, offering promising advancements in patient care and outcomes. These advancements include artificial intelligence (AI)-powered diagnostics and treatment recommendations, wearable devices for real-time health monitoring, and telemedicine platforms expanding access to healthcare services.

Education Enters the Digital Age

Startups employing technology to enhance education also experienced robust investment in 2023, with total funding reaching $16 billion. This growth is fueled by the demand for online education, particularly in the wake of the COVID-19 pandemic, and the growing popularity of personalized learning approaches.

Technology-enabled education platforms are transforming the way students learn, offering greater flexibility, accessibility, and individualized instruction. These platforms provide adaptive learning experiences, personalized feedback, and engaging content, catering to diverse learning styles and fostering a more effective and engaging learning environment.

2023 Startup Funding Trends

Global VC Funding Declines

Total global VC funding in 2023 stood at $221 billion, a significant drop from $381 billion in 2022, representing a 42% decrease. This decline highlights the impact of the broader economic slowdown on the startup ecosystem.

Late-Stage Funding Adapts

The median late-stage funding round in 2023 settled at $100 million, reflecting a decrease from $150 million in 2022. This shift suggests a more cautious approach from investors, favoring companies with proven track records and lower risk profiles, as they navigate the uncertain economic climate.

Seed-Stage Funding Faces Challenges

The median seed-stage funding round in 2023 stood at $2 million, down from $3 million in 2022. This decrease indicates increased scrutiny from investors, as they prioritize funding startups with strong founding teams, clear business models, and a compelling path to market.

Strategies for Startups to Thrive in the 2023 Funding Landscape

Despite the challenges posed by the economic downturn and the changing dynamics of the VC funding landscape, startups can adopt several strategies to enhance their chances of success and secure funding:

Demonstrate Strong Fundamentals. Startups should focus on building a solid foundation, with a compelling business model, a clear market opportunity, and a strong team with relevant experience and expertise.

Develop a Clear Value Proposition. Articulate a clear and concise value proposition that highlights the unique benefits and problem-solving capabilities of the startup’s solution.

Prioritize Traction and Validation. Demonstrate traction and validation by hitting early milestones, securing customer adoption, and garnering positive feedback.

Network and Build Relationships. Cultivate relationships with potential investors, mentors, and industry experts who can provide valuable guidance and support.

Seek Alternative Funding Sources. Explore alternative funding sources, such as angel investors, crowdfunding platforms, or government grants, to diversify funding options.

Adapt and Pivot When Necessary. Remain agile and willing to adapt the business model or pivot the strategy based on market feedback and changing circumstances.

Navigating the Ebb and Flow with Resilience and Innovation

The 2023 startup funding landscape presents a unique set of challenges and opportunities for entrepreneurs. While the overall slowdown in VC funding may pose obstacles, there are still avenues for funding and growth for startups. By adopting strategic approaches, startups can secure the necessary resources and bring their ideas to life.

To learn more about 2023 startup funding trends, see if you qualify for membership to join Founders Network.

To learn more about startup fundraising in the current economic climate, register to attend Fabrice Grinda’s webinar on December 12.

Over the last decade marketplace startups and network effect businesses have gained strong investor interest due to their value.

Last year, marketplace startups raised $56 billion in venture capital funding, just behind fintech startups that collectively raised approximately $65 billion.

However, while marketplaces garnered the second largest portion of VC funding in the tech industry, funding for marketplaces in 2022 was down 50% year-over-year, mirroring the overall decline in venture funding.

In the current climate, fundraising is difficult for startup founders across industries. But if you ask serial entrepreneur and investor Fabrice Grinda, the current climate also presents opportunities. 

“I would argue, this is the very best moment to found a company,” Fabrice says. “The posers and the people that were in it for the quick buck, the consultants and bankers and lawyers and doctors who had no business being founders, basically have been weaned out and left.”

Fabrice is among the world’s leading Internet entrepreneurs and investors. He has more than 300 exits on 1000 angel investments, and has served as CEO for three multinational companies. Today, he serves as the founding partner of FJ Labs, a VC firm focused on marketplaces and network effect businesses.

On December 12, he’ll lead a Founders Network webinar to provide insights on startup fundraising in the current economic climate. The event will also serve as a masterclass on marketplace startups and will cover:

• How investors evaluate marketplace founders
  
• How to build marketplaces
• Latest marketplace trends

Here’s a sneak peek. 

Lean Startups

Despite the challenges the current climate presents for startup fundraising, Fabrice says the benefit is that it forces startups to be lean. This includes a heightened emphasis on monitoring cash burn and meticulously scrutinizing unit economics, which can ultimately lead to greater success. 

“Yes, it is hard to raise funds,” Fabrice says. “You’re going to raise money at a lower valuation. When and if you exit, it’s going to be at a lower multiple. But now you’re building a way more sound business. Right now is an amazing time to be a founder, even though it’s harder to raise.”

Startup Competitors

Research indicates startups thrive in recessions. According to data from StartupGenome, during the 2008-2009 downturn, specifically, a number of tech unicorns were created at a total value of $150 billion. Part of the reason Fabrice believes startups are able to thrive in tough economic conditions is because there’s less competition. 

“In 2021, when you were building a company, you had like 50 people doing the exact same thing, all with great teams, all well funded.  Now you’re one of two or three,” Fabrice says. “So this is not the moment to lose hope. This is the moment to actually go and build something. The very best companies of the 2010s were built in ‘08 and ‘09. Uber, WhatsApp, Slack, Instagram, all came in that time period.  I suspect that the very best companies of the 2020s will have been created in ‘23.” 

Marketplace Startups

Despite the current decline in funding, marketplace startups and network effect businesses have a strong track record of success. According to Dealroom, 70% of the value created in tech over the past 24 years comes from network effects. Five out of ten of the most valuable companies in the world are built on top of strong network effects. And 63% of newly established unicorns are platforms. 

This value is what attracted Fabrice to marketplace startups in the first place. Before founding FJ Labs, he’d already funded 150 startups as an angel investor and most of them were marketplace startups. 

“Marketplaces are amazing companies,” Fabrice says. “The core underlying business is reasonably capital efficient. They’re established business models and they’re great businesses. It’s a winner takes all market.”

To learn more about startup fundraising in the current economic climate register to attend Fabrice Grinda’s webinar on December 12.

This shift in the tech industry is sure to mean increasing competition for startup capital, all the while a looming economic downturn means startup investors are tightening their belts. 

Startup investor and tech executive Maile Keone has seen this ebb and flow of startup capital before. She says the startup funding landscape is constantly changing and emphasizes that increased competition is forcing startups to explore a variety of funding options.

“It’s gotten a lot harder to raise money in many ways. There’s a lot of competition out there that there hasn’t been in the past,” Maile says. “There’s also been a shift in where you access capital and how you get it.”

Maile is the President and CEO of Listen Technologies, an assistive listening and tour system provider. She primarily invests in the technology and real estate sectors. 

On March 8, Maile hosted pitch practice and office hours events for Founders Network members where she provided insights to help startup founders access funding. We talked to her about the changing startup funding landscape and what she looks for when considering potential investments. 

Advice for Entrepreneurs

Maile has a diverse set of experience that includes starting a company from scratch, working for large multinational companies, and everything in between. Today, she uses that experience to mentor other startup founders through her roles as a board member at Venturecapital.org and the Women Tech Council.

“My love for entrepreneurs comes from the tenacity they have, the guts, the grit,” Maile says. “I get excited by people who have passion.”

Maile is fond of saying that her exits from the two companies she founded wouldn’t have put a child through a semester of college, but she says they were great learning experiences. 

“I have worked with and mentored hundreds of entrepreneurs and the best one piece of advice I can give any of them is know yourself, know if you’re up for the journey. It’s one of the hardest things people do–think of an idea, build a business, try to go out to raise money, and follow through to reach success.

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

Funding Trends

When Maile launched her first startup, she did so with the help of a $50,000 loan from her dad. Today, while the startup  funding landscape has changed, and options for funding have increased, she says friends and family remain a common source of capital for early-stage entrepreneurs. According to one report, 38 percent of founders report raising funding from this source. 

“Friends and family are still a great source for people, especially if they can get non-dilutive loans from their friends and family instead of giving away equity,” Maile says. “There’s also tons of accelerators that didn’t exist when I was first out raising money. It seems like every college has an accelerator or a venture fund.”

How to Stand Out

When it comes to making her own investment decisions, Maile looks for entrepreneurs who can easily illustrate the connection between their product, their market, and their customer. 

“A lot of investors ask ‘what problem do you solve?’ For me, it’s one step farther,” Maile says. “You’re solving a problem, but are there a bunch of people waiting on the other end who need that problem solved and how are you going to access them?” 

She also values founders who aren’t easily swayed. 

“My pet peeve is entrepreneurs who aren’t anchored or centered, who take advice from everyone and just pivot, pivot, pivot,” Maile says. “No one knows your business like you do. You have to take all of the advice people give you and filter it. Filter it through what you know, what you know about your business, and your own experience.”

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

What Is a Startup Pitch Deck?

A startup pitch deck or investor pitch deck should serve as your company’s highlight reel. The goal of the deck is for startup founders to create a visual presentation that can be used to communicate their ideas to potential investors, partners, and customers.

A well-crafted deck should be 10 to 20 slides and includes appealing images, graphs, and charts. 

It’s essential to structure your deck to make you stand out from the rest when pitching to angel investors and venture capitalists. To get this right, remember the basics:

• Keep it simple
• Make it memorable
• Include a clear call to action

The ultimate goal of your deck should be to get into the room and increase your chances of securing a ‘yes’. Oftentimes a pitch deck will be shared over email, LinkedIn, or through an investor’s website before pitching in person.

The Importance of A Pitch Deck for Startups

To effectively outline your pitch, it’s important to put yourself in the investor’s shoes. What are the core pieces of information you would need before investing in a company?

A great way to learn what makes a compelling pitch deck is by researching top pitch decks from companies like Uber, Facebook, and Tesla. By researching what’s worked, you’ll get closer to understanding how you can create a deck that stands out from the crowd.

Pitch decks are designed to quickly communicate a startup’s strengths in a concise manner. They do not overwhelm listeners with jargon or added details. Presentations should also include the most important information about your idea, team, and potential market opportunities for growth.

Winning decks always have the following factors covered:

• The problem and market opportunity
• Your solution and why you’re better than the competition
• Why your company is worthy of an investment

Investors and potential clients view a pitch deck as the business’ first impression.

A great slide deck will be able to convince investors that your product has the potential for success. In order to do this, you need to create an emotional connection with prospective clients and partners with a clean and unified message.

To learn more about creating an effective startup pitch deck, see if you qualify for membership to join Founders Network.

8 Key Components of A Successful Pitch Deck

There are several important components to include in your deck. A good starting point is to follow the Lean Canvas model  to ensure that you’ve covered problems, solutions, key metrics, and competitive advantages in three core slides.

Your full 10- to 20-page deck should include the following eight key components:

1. The Problem 
2. The Solution
3. The Market Opportunity
4. Your Business Model
5. Competition
6. Team 
7. Financial Projections
8. Funding Request

And remember, your pitch deck will evolve as  your company becomes more mature and you move from seed funding into Series A, B and C funding rounds.

1. The Problem 

Start by highlighting the problem at hand in a clear and compelling manner. Create a clear narrative that will resonate with your audience and create a lightbulb moment. A problem statement should introduce tension in the market that you have a quick solution to solve.

When crafting your problem statement, you should focus on the potential side effects of it being left unresolved. Make your assertion focused, concrete and straight to the point. You should emphasize the urgency of the problem and look to evoke empathy by making personal connections.

2. The Solution

Take time to get your solution statement right. The shorter and sweeter your fix is, the more memorable it will be for investors. Often founders are too close to their product to hone in on one core value proposition. In this case, step away from the details and look to focus on what makes your customers most satisfied.

Your solution when finished should be as short as a sentence. Your value proposition should not need an explanation and should be concise enough to fit into one slide. Remember to tie your solution directly to the problem you already addressed. Otherwise, if you offer too many solutions, you can quickly look misaligned and not ready for an investment. 

3. The Market Opportunity

Before jumping too far into the details, it’s essential to show that there is a pathway to profit. Investors want to quickly understand the scale of the problem and the market potential.

Set the stage by developing three core personas that wrap into one larger market segment, each bringing a unique angle for your product. To achieve this, create a slide view of the market size and opportunity.

Be sure to tailor your market to your product. If you are focusing on a direct-to-consumer model, include demographics including income, location, and age. For B2B companies, focus on the size of your market through key metrics such as business size, potential market capitalization, location, or potential integrations.

4. Business model

Once you have offered your problem, solution, and how you fit in – show your audience how exactly you will execute your idea.

This section of your deck is where you begin to win investors. Make your business model clear by sharing:

• Business structure
• Gross revenue
• Pricing models
• Profit margins
• Marketing and sales plans

Once you have these pieces down you should be prepared to define how you landed on your estimates and how they hold up.

If your business is in a pre-revenue or idea stage, include compelling projections and clear competitor models that underline how your offering is inclined to grow in the market. Remember that angel investors and venture capitalists want to invest in a business that’s sure to succeed.

5. Competitive analysis

When it comes to competition, it’s important to show that there’s no one quite like you. An effective way to do that is to go back to the problem statement to remind your audience that you have the best solution for it.

This part of your presentation is one of the most essential.

Understanding your competition is just as important as understanding your product and customer. It is critical to showcase a thorough competitive analysis to show that you know the market and have the potential to outshine the rest.

The Gartner Magic Quadrant is the gold standard for tech startups who are looking to wow investors. It uses a grid format to categorize players across leaders, visionaries, challengers, and niche players.

No matter where you land in the quadrant, it is important to use numbers and facts to prove that you know your market and are the leader of your pack.

6. Team

Once you’ve defined the competitor landscape in the market, introducing your team can be an excellent way to back up your track record for success. Be sure to showcase the strengths and successes that your team, investors, customers, or partners bring to the table. A track record of success will always make it easier to raise funds.

Include the following details to validate your expertise:

• Background and work history of founders
• Subject matter expertise and core skills of the team
• Total years of experience 
• Management and business skills 

Let’s face it, Mark Zuckerburg was just a name until success came. Whether or not you are already a successful founder, don’t shy away from believing in yourself and putting your best foot forward. Look for ways in which you can entice investors to want to invest in you over others by proving to them that you are the top experts in your core market.

7. Financial projections

Seasoned investors want to be sure that founders have a good grasp of their market and product. In fact, investors often use projections to ensure that founders understand their market and numbers well enough to be worthy of sustaining an investment.

When you create your projections you should demonstrate how your business model will be successful. A helpful approach is to have a tiered model for your forecast. Start by sharing your historical financial records to date. Then, simply include your revenues, gross profits, and net profits, on a month-by-month basis. Always be prepared to back up your assumptions and call out any metrics that could cause pause.

When you craft your projections it’s important to shoot for a 3- to 5-year runway into the future. This will give investors enough time to see their short-term earning potential and a view into how the business will fare in the long run. 

8. Funding request

Asking for funding is the point in your presentation where you must wrap all the pieces into one compelling ask. Go into the funding request with a clear and precise number. You should be able to deftly detail exactly how you landed at your request valuation, the ways it will support the business, and the results the capital infusion will produce.  Remember to detail how the investment will enable key milestones. It’s also important to integrate details on product development, your break-even point, and earning potential.

Many founders think their role is to convince investors to buy into their business. Try a different angle by displaying the money, vision, and accomplishments they will miss out on if they do not invest in your company. At the end of the day, you are likely looking for a strategic partner – not just a capital infusion.

Tips for Creating an Effective Pitch Deck

The core formula for a winning deck is to focus on telling your story in four to five of your slides. For most founders, this can feel impossible due to how close they are to their product.

A helpful tool for sharpening your deck is to open it up to critique. In feedback forums like Founders Network Pitch Practice events, entrepreneurs can get direct feedback on their pitch and investor startup decks. This can include advice on how to structure and organize the deck, how to choose the right visuals and graphics, and how to effectively communicate your message. 

Another tool is to do your research. Look for tools like pre-designed decks or design services like Slidebean or UnicornPitch that help founders nail their decks. This can even enable founders to create a pitch deck in one day. When crafting your deck you can also integrate tracking mechanisms to find out which slides are being viewed and your best process for refining your pitch and following up on your ask.

Throughout the process, remember the basics: keep it simple, make it memorable, and include a clear call to action. Keep your design clean and your text free of jargon. Always review your deck to be sure you’ve included the eight key components of a killer pitch deck, as listed above.

Pitch Deck Best Practices

Once you’ve taken time to sift through pitch decks of some of the largest companies, you’ll likely see some core features that make a compelling deck stand out. Generally, this includes interesting graphics and images, a compelling problem and solution, and a palpable passion for the product.

A few of the top visual best practices are to:

• Keep branding consistent by using high-quality images
• A defined color palette
• Consistent text sizing (free of typos!)
• A clear and unified voice 

It’s also important to remember the smaller details. For example, always send a pitch deck as a PDF to ensure formatting consistency. And, never forget to add in your copyright. 

Oftentimes a pitch deck is sent digitally. Craft a short and tailored message to each investor you share your deck with to ensure it’s personalized. Offer the opportunity to demo or test your product for free – and be sure to show that you have a market ready for your product.

Some founders will choose to hire companies to help them in landing their deck and initial pitch which can pay off in the long run. Whether outsourcing or keeping development in-house, make a point to review the deck monthly for consistency.

What to Avoid

At the same time, when sifting through multiple pitch decks and investor decks – you will find some tactics and approaches that fall short.

Here’s a quick and non-exhaustive list of what to avoid:

• Never make the pitch deck more than 20 slides long. Less is often better. 
• Don’t bash your competitors. You never know who may be in the room.
• Don’t provide excessive financial details, as that can be provided in a follow-up.
• Don’t try to cover everything in the pitch deck. The pitch deck should be what gets you into the room to do the explaining. 
• Don’t use a lot of jargon or acronyms. Always aim to simplify.
• Avoid a poor layout, low-quality graphics, or pixelated images. Hiring a graphic designer to polish off your deck can be the difference between landing and missing the deal.

There’s always something that can be improved in every deck. Investors review hundreds of decks each month. In fact, a recent study found that potential investors spend about three minutes and 44 seconds looking at a pitch deck when it is not presented to them. Strive for greatness, and remember – when pitching to an investor, your deck may be one of 30 they’ve seen that week. Make sure you stand out.

3 Examples of Winning Pitch Decks From Successful Startups

While you may have found your own pitch deck favorites, we have ours too. Check out the list below of three different companies whose pitch decks enabled them to secure investor funding across Seed, Angel, and VC stages. 

Uber

Uber is the top tech giant known as the inventor of on-demand ride-sharing. Their original 2008 pitch achieved success by offering a quicker and easier alternative to cabs. Their proposal quickly gets to the meat of solving a market gap by offering consumers a ‘1-click hailing’ solution. Even more powerful is the clean, clear, and compelling way they were able to easily detail their pitch by using less than 100 words on each slide.

Airbnb

In 2009, short-term home rental leaders at Airbnb used their minimalistic pitch deck to secure $600,000 from Sequoia Capital and Y Ventures. Their methodology was clear: Use visuals, not words to tell the story. As a company with users active at the time of their pitch, they also made good use of testimonials, press, and product demos to show the proof of concept for their design.

DropBox

Cloud storage platform, DropBox, built a deck that secured a small $15,000 Venture Capital investment that quickly grew to a $16 billion dollar company. Their pitch deck includes the eight core pillars of a successful deck, and artfully displays a feature ranking table to easily establish them as a leader against their competitors. While the presentation is not as aesthetically appealing as Uber or Airbnb, DropBox understands that less is more by using large fonts and few words.

You can explore lists of additional successful decks on TechCrunch, Piktochart and CirrusInsight.

FAQs About a Startup Pitch Deck

Ready to get started on your pitch deck? If so, take a look at our FAQs to ensure you’re ready to hit the ground running.

How much does it cost to make a pitch deck?

Making a pitch deck is free. Despite this, it is important to spend time and energy on getting it right. Some investors may choose to hire an experienced designer to polish the deck for up to $4,000. You can also work with a communicator and designer which can cost up to $10,000. It is also a great idea to attend events like Founders Network Pitch Practice and Office Hours events to get feedback directly from investors.

How many slides are in a startup pitch deck?

A startup pitch deck or investor deck should have 10 to 20 slides.

How do you structure a pitch deck?

A pitch deck should be structured as a 10 to 20 slide deck with the following eight components:

1. The Problem 
2. The Solution
3. Target Market and Opportunity
4. Your Business Model
5. Competition
6. Team 
7. Financial Projections
8. Funding Request

You may find other, similar models for pitch decks. As long as you cover the pieces above, your deck has the essentials for success.

Does a pitch deck include financials?

You should always include financial details when they help to illustrate your success. Financial data should include your expenses, revenue/income, KPIs, and core projections. Find the numbers investors like to see most here.

What legal disclaimers should a startup pitch deck include?

A pitch deck is intended to inform investors about your product. You should include factual information in your pitch presentation. You do not need to include any legal disclaimer on a pitch deck. Despite this, be sure to list if your product has a copyright, patent, or trademark.

What are the contents of an idea-stage startup pitch deck?

An idea-stage startup pitch deck is similar to any other pitch deck. Your presentation should include the following:

• Problem: Describe the problem your company solves
• Solution: How you solve it
• Market opportunity: Your business model
• Competitive analysis: Your value proposition
• Roadmap: Proof of concept from case studies and examples
• Team: Founders and investors
• Financial projections: Where you plan to meet the market
• Funding Request: A clear number that will help you reach your next milestone

What should you avoid putting on a startup pitch deck?

Startup founders should avoid pitch decks that are over 20 slides and not well designed. Many times founders over-explain and use too much jargon in pitch decks. Most importantly, don’t put any reason for an investor, partner, or customer to say no in your deck. Don’t point out your weaknesses. Highlight your strengths. 

Which accounting statements do I need for my startup pitch deck?

You should have five financial documents prepared to share. These may show up as an appendix or once requested as a follow-up:

• The assumptions sheet 
• The balance sheet 
• An income statement
• Cash flow statement 
• A statement of shareholders’ equity

Do your research to learn more about the accounting statements you should prepare.

Are you ready to nail your Pitch Deck?

A clear and compelling pitch deck is a foundational element to any startup’s success. Founders who craft investor pitch decks that effectively showcase their vision consistently secure funding. A killer pitch wins customers and partners by defining a company’s value-add, showing proof of concept, and clearly describing how it outshines the competition. By incorporating the tips found in this article, you are sure to craft a deck that will win investors.

Ready to test your luck? Take the first step by enrolling in a local pitch competition or see if you qualify for membership to  attend one of Founders Network’s investor pitch practice and office hours events.

Founders Network offers tech entrepreneurs a community of ideas, support, and mentorship. Whether  you are crafting your first pitch, looking to connect with investors, or simply interested in connecting with a like-minded community – we offer support for founders at all stages.

If that news has you wondering, “What does that mean for venture capital financing?” you’re not alone. 

VC financing counsel Robert Suffoletta has founders covered when it comes to anticipating and responding to trends for 2023. Suffoletta is a partner in the corporate and securities practice of Wilson Sonsini Goodrich & Rosati, a law firm that specializes in business, securities and intellectual property law. 

On Jan. 24, 2022, Suffoletta hosted a webinar for Founders Network where he discussed the outlook for venture capital financing for the new year.

To learn more about venture capital financing for 2023, see if you qualify for membership and check out the webinar from January 24.

Valuation Trends

In order to anticipate what’s to come for venture capital financing, it’s critical to evaluate end of year trends. A recent report from Wilson Sonsini Goodrich & Rosati has broken down financing trends for the third quarter of 2022. 

After reaching all-time highs in the second quarter, median pre-money valuations took a dip in the third quarter for most fundraising rounds. 

According to the report, here’s what happened to median pre-money valuations between the second and third quarters of 2022:

• Series Seed financings declined from $18 million to $15 million. However, that’s above the 2021 median of $10.5 million. 
• Series A valuations declined by more than half, from $60 million to $29.9 million. That’s just below the 2021 median of $30.5 million. 
• Series B valuations dropped from $195 million to $190 million.
• Valuations for Series C and later fundraising rounds increased from $255 million to $390 million. But, that’s still below the record-breaking 2021 median of $465 million. 

Mixed Results for Fundraising

Founders have experienced mixed success while fundraising in the third quarter, depending on the round. 

The median amount raised for Series A and Series C and later rounds saw slight declines. 

• From $9.9 million in Q2 to $8.2 million in Q3 for Series A 
• From $43.2 million in Q2 to $30.8 million in Q3 for Series C and later rounds

The median amount raised for Series B financings more than doubled between the second and third quarters of 2022 – from $25 million to $54 million. 

As a result of these trends and expected conditions in 2023, “there is a big focus on trying to raise less money or make the money you raise last longer,” says Suffoletta. 

The Rise of Investor-Favorable Terms

For early-stage startups without performance data, Simple Agreements for Future Equity or SAFE notes are a popular tool for raising capital. The agreement converts to shares in a future financing round. 

In the third quarter of 2022, the median amount raised for SAFE agreements trended downward, according to the Wilson Sonsini report, from $1.2 million in Q2 to $0.88 million in Q3.

In addition, the proportion of SAFE notes that include a “Most Favored Nation” clause – which protects investors – rose from 15% in 2021 to 23% in Q1 to Q3 of 2022. The proportion of SAFE notes using a valuation cap, another safeguard for investors, also increased from 86% in 2021 to 90% in the first three quarters of 2022. 

In the webinar, Suffoletta covered: 

• Fundraising trends for 2023
• What to expect for valuations
• SAFE financing and bridge loans
• Making the money you raise last longer

To learn more about venture capital financing for 2023, see if you qualify for membership and check out the webinar from January 24.

“The youth, Gen Zers have landed on this planet like aliens, and they’re about to take over. They are living in the future in their heads, and I have no doubt that the ones who are technical can actually start building it,” he says. 

In his more than 10 years at venture capital firm General Catalyst, Bonatsos has worked with the greats – like Snap and Discord. Now he’s shifting his focus to startup newbies. By pairing first time Gen Z founders with more seasoned mentors, he’s helping usher in and train a new generation of entrepreneurs. 

On Feb. 7, Bonatsos hosted a webinar for Founders Network where he shared insights from working with Gen Z founders. 

To learn more about changes in startup culture,  see if you qualify for membership and check out the webinar from February 7.

What Makes Gen Z Founders Different 

The group’s oldest members are about 26, so Gen Z founders grew up on the internet. And, they firmly believe they can have careers making money on the internet, Bonatsos says. 

Their unique values are reflected in what they create, like, for instance, the generation’s increased progressivism and sexual fluidity. For example, when it comes to online dating products, Bonatsos is hearing pitches for apps that provide options for people to reimagine relationships and experiment with sexuality and non- monogamy. 

In order to combat their lack of experience, Bonatsos pairs Gen Z and first time founders with more seasoned entrepreneurs who now have time to give back. 

“We at [General Catalyst] have helped a ton of first time founders and immigrant founders make fewer mistakes than they would otherwise make on their own,” he says. 

The Gen Z Founders Who Succeed

The most successful Gen Z founders who pitch to Bonatsos are building for themselves, meaning they are creating products and services that address their own needs.

As a result, successful Gen Z founders already demonstrate prowess in one of the most critical aspects of the sales pitch – proving there’s an audience for their products. 

For instance, “I’m 23 years old. I’m a nerd developer. I think my productivity really sucks. I’m going to build a dev tool to improve my productivity as a developer,” Bonatsos offers as an example. 

But, in evaluating young entrepreneurs, Bonatsos looks for founders and teams with an age old strength: the ability to adapt to change.

“Time is money, because markets don’t wait for you,” he says. “We’re looking for founders who are learning animals, like they treat every meeting, every user interaction, every conversation with somebody who has experience as a learning opportunity.”

Building a Team at 19 Years Old

Some Gen Z founders make the mistake of going into business with their friends, says Bonatsos. They’ll go into business with roommates without thinking about pairing their vision with complementary skill sets. 

But young entrepreneurs need to be strategic when deciding how to form a startup team. Bonatsos is specifically looking for founders and teams with technical backgrounds.

“I want the whole team to be technical, so that they can make progress really quickly. If the first idea doesn’t work out, which is very often the case, we can jump into another idea. Because, if it’s mostly business people, it’s going to take us a long time to come up with a new perfect idea,” he says. 

Furthermore, Bonatsos recommends that Gen Z founders and first time founders identify a high-quality mentor who is a few years ahead of them in the startup launching process.   

During his webinar, he also discussed: 

• Changes in startup culture
• Getting noticed on Tik Tok
• Crypto obsessions
• Mentoring Gen Z
• What makes a successful Gen Z founder

To learn more about changes in startup culture,  see if you qualify for membership and check out the webinar from February 7.

In the next year and a half, he raised nearly $150,000 to support his social justice-oriented mission: increasing mental health resources for people in prison. 

Through Like YOU!, which he started in early 2021, Young aims to partner with state prisons, juvenile facilities and county jails. The startup is designed to connect incarcerated people with culturally relatable cognitive behavior therapy via smart tablets already available in most of these facilities. 

Young will be among the speakers at this year’s fnSummit 2022, Founders Network’s annual fall conference. The event connects founders, investors, and partners in the startup ecosystem. In a fireside chat, Young will share his unique story and how he navigates the startup world as a Black man and formerly incarcerated person.

Here’s a peek of his startup journey. 

An Uphill Battle

During Young’s sentencing hearing for low-level drug crimes in 2014, he delivered a powerful speech – articulating his knowledge of subjects from American history to economics – to convey to the judge that he had what it takes to succeed. He hadn’t been afforded the same opportunities as the other people in the room. But, if given the chance to be released, he had the aptitude and the curiosity to pursue his aspirations. 

The judge at the hearing was so impressed that he resigned in protest of the mandatory sentencing laws that required him to give Young a long sentence. The judge’s resignation led to national attention and eventually Young’s release in January 2021. 

“You have to be willing to ask questions. You have to be able to learn, to absorb the information so you can then turn around and apply it,” Young says. “That is one of the main things I did the whole decade I was incarcerated. That is what led to the judge being so impressed at my sentencing speech.”

A Personal Mission

The inspiration behind Young’s startup Like YOU! is deeply personal. Two years before he was arrested and incarcerated, his brother died by suicide at the age of 20. The brother had served as Young’s surrogate parent. Young spent his decade in prison regretting that he hadn’t been able to intervene to help his brother. 

“I kept thinking about the intersection between mental health and technology,” Young says. “And I kept thinking, how could I have helped my brother and how can I help others?”

He focued his passion for mental health on his own environment, where resources were extremely limited. There were only three mental health professionals for 1,500 people in the prison. 

“So if somebody ever needed to talk to them, you can imagine, they didn’t have the time,” he says. 

That’s not uncommon. In fact, the shortage of mental health professionals in U.S. prisons is so dire, the national average is one therapist per 200 incarcerated people. 

Fundraising Challenges

Young’s startup is designed to reduce recidivism and provide incarcerated people with the tools and education to perceive the world differently. Many tech founders in the startup ecosystem who have attended elite schools often graduate with financially powerful networks that can be tapped during rounds of startup fundraising. However, Young has had to find creative ways to raise the funds to make his dream a reality. 

“A lot of those founders, their family and friends round can easily reach $300,000 to $500,000. That is not normal amongst most families of color,” Young says. “Most of us don’t have the network that other founders have.”

So, for Young, bootstrapping and finding creative ways to save money are critical. For example, he’s struggled to hire, as it’s difficult to pay early employees salaries. Instead, Young is using vested equity to compensate his two full time employees.

—

fnSummit 2022 encapsulates the Founders Network experience, giving startup founders the opportunity to learn from other tech founders in the startup ecosystem, build deep relationships with investors, and uncover solutions to the challenges they’re facing. The annual event provides the perfect setting for off the record discussion, reflection, and networking.

Learn more about Founders Network see if you qualify for membership

In April, ecommerce platform Bolt announced an agreement to acquire cryptocurrency infrastructure provider Wyre. The acquisition promises to be the largest crypto acquisition in history. It comes nearly a decade after Wyre was founded in 2012, when the cryptocurrency market was still in its infancy. 

“We got into crypto super early. In 2012, crypto was absolutely a trash bin. A lot of companies dived and it took a lot for us to stay in,” says Wyre co-founder Ioannis Giannaros. “We were extremely resilient and we were nimble in the face of change. We wouldn’t be here today if we didn’t make pivots and think long term.”

On July 27, 2022, Giannaros hosted a webinar on his crypto startup journey with Founders Network members during our July global keynote presentation. As part of the event, he provided the lessons he’s learned about revenue, product-market fit, and fundraising. 

 

Check out his full webinar from July 27th or explore our entire event video library

Here’s a sneak peak of the event.

Double-edged sword

Prior to starting Wyre, Giannaros worked primarily with revenue focused companies. Using his expertise, Wyre was able to post impressive revenues in its early stages. However, while revenue can be a sign of success, looking back Giannaros says this early focus on revenue hindered the crypto startup in certain ways.

“Very early on in our journey, in 2013, we posted a lot of revenue so we became very revenue focused from day one,” Giannaros says. “That is a very challenging thing to overcome because once you’re revenue focused you have to remain revenue focused. There’s no way of turning back.

“There is a game to growing a Silicon Valley based company that is significantly different from growing a revenue based company. It took me a while to realize that.”

The path to product-market fit

While securing revenue came naturally, finding product-market fit was something the crypto startup struggled with. That’s true for many startups and according to one report, 42 percent of startups fail because they do not find product-market fit.

“We found revenue very early on, but product market fit wasn’t there,” Giannaros says. “Product market fit wasn’t solidified until 2018. It was a really long path for us and that was a very challenging thing.”

A different fundraising approach

Wyre’s early revenue success also impacted the way they approached fundraising. Unlike some venture-backed startups that can raise based on an idea or market analysis, Wyre had to continuously demonstrate revenue to satisfy investors. That’s why Giannaros recommends startups put thought into their fundraising strategy and business approach early on. 

“If we had raised money on hopes and dreams, it would’ve been a much different story. 

Some people will say you have to post metrics before fundraising while others say you can fundraise on a deck, an idea, and a vision. But our lesson was to put thought into where you’re planning on going. There is a game to fundraising.”

In his keynote Giannaros covered:

• The reasons Wyre succeeded where other crypto startups failed
• How VC-backed startups are different from traditional businesses
• The importance of fundraising strategy
• How to find product-market fit
• The keys to managing early revenue

To learn more about revenue, product-market fit, and fundraising, see if you qualify for membership and check out or video from the July 27, 2022 keynote.