Ever wonder how investors get a piece of a startup before any shares are even issued? Let’s break down how SAFEs and valuation caps work, and why they’ve become a go-to tool for founders looking to raise money fast without giving up equity right away. When things like convertible notes and SAFEs came into play, the whole point was to give founders a faster way to raise capital. Get money in the door, get back to building. Now, a key thing here is that convertible notes and SAFEs aren’t actual equity investments upfront - investors don’t get shares in the company right away. Instead, with a SAFE (which stands for Simple Agreement for Future Equity), it’s exactly what it sounds like - an agreement about how the money investors put in now will eventually convert into equity down the road. That conversion happens at the next equity round. So, when the company decides it’s time for a more formal raise, bringing in equity investors, all the legal paperwork gets done and the people holding SAFEs convert their investment into shares. Now let’s talk about where valuation caps come into play. Basically, what a valuation cap does is set the terms for how and at what price your investment converts when that future equity round happens. For example, let’s say you invest a million bucks into a SAFE with a $10 million post-money valuation cap. What that means is when the company goes to raise that next equity round, if the company’s valuation is higher than $10 million, your SAFE investment still converts as if the valuation was $10 million. Let’s break it down even further. If the company has 10 million shares outstanding, and the valuation cap is $10 million, then that works out to a price of $1 per share. So, your $1 million investment gets you a million shares when the SAFE converts, even if the actual valuation of the company is higher at the time. I'd keep going, but I dropped a full episode on @fundedpod on this topic today. Take 9 minutes out of your day and give it a listen! I'll leave it below

I recently got to chat with @stacymei about how she closed her $7.6M seed round for @VenteurHealth. It was a crazy good convo Here are my top 3 takeaways from our conversation: 1. Calendar Density FTW! "We talked to close to a hundred firms in April and we finally ran the process. You know you read about it, but pulling it off is different . . . putting it all in a two-week period . . . having your data room ready to go on day one, having the follow-up materials ready to go, having your customer references there. So we talked to about a hundred and actually the raise was done by the end of April and we were over oversubscribed." - Stacy What a feeling! Stacy was able to wrap up her seed round in a month during April of 2023. If that doesn't show you that calendar density is still possible I'm not sure what will! Note that this was also possible because of the relationships she had made trying to raise her seed earlier that year... good things take time. 2. A fundraise is not done until the money is IN the bank "I think something we have come to appreciate about fundraising is, it's not done till it's done till it's like. . . DONE, right? So, we had made that mistake previously and we were [like], ‘never again.’" - Stacy Just last week, I had a founder hit me up excited about how his raise was going so far. He said he had interest from multiple investors, and he was thinking he was going to receive a term sheet. He was super pumped. I let him know that it sounded great... but to not get too excited or create too many expectations. Things can change FAST in VC. Keep that calm confidence and reduce excitement until that $$ is in your hands 3. Investor-founder relationships are a two-way street "You don't really want somebody who's wishy-washy on your cap table. You want a hell yes, and if you're not a hell yes, like, we shouldn't be working together. So that's where I don't feel any regret. I think that it means that we're not on the same page, and if we're not on the same page, then let's give it more time or . . . it just wasn't meant to be." - Stacy This response came after I asked Stacy about some of her worst fundraising experiences. I wanted to highlight this because I think founders (especially early-stage) tend to overlook the fact that investors aren't just choosing you, you are also choosing them. Would you commit to dating someone you didn't know much about? Probably not. Be cautious, that's all. Alright, those are my 3 takeaways. This doesn't even scratch the surface of the full episode so I do hope you give it a listen. If you want to hear: - Stacy's experience going out to raise after Techstars - How Ventuer raised their $7.7M seed round - How they were able to close their seed round in under a month and more... make sure to listen to the full episode on @FundedPod. I'll leave the links below! Another huge thanks to Stacy for coming on and sharing tons of value for founders

Recently I chatted with Heather Shoemaker, the powerhouse behind Language I/O, a translation software company that recently raised an $8M series A. Her insights were golden, so I'm gonna share my thoughts on a few with you:

What startup founders would enjoy a podcast that has founders share the story behind their recent fundraise? Hearing real experiences in the industry and learning from them. The good news is - I already created it (@FundedPod) with 30+ episodes Here are my top 4: 1. Christina Cacioppo - raised $203M for Vanta @christinacaci @TrustVanta 2. Sam Corcos - raised $57M for Levels @SamCorcos @Levels 3. Emmanuel Straschnov - raised $106M for Bubble @emmanuel_s @bubble 4. Suneera Madhani - raised $263M for Stax @SuneeraMadhani @staxpayments Those are just my top 4. Make sure to check out the others and subscribe or follow wherever you get your podcasts - new episodes drop every 2 weeks! Most recent one dropped yesterday with @DylanBeynon on raising $50M for @mymindbloom. Check it out!

Should you reengage with investors who passed on your startup previously? This is something I get asked all the time, and in my most recent episode on @FundedPod, I got to share my thoughts on it Here are the top 3 takeaways: 1️⃣ Investors Hate Passing: Understand that investors rarely want to pass on potential game-changers. External pressures force them to provide "clean passes," but they're secretly rooting for your success 2️⃣ The Power of Progress: If you wish to reengage, your story must evolve. Update your narrative, metrics, and traction to show some substantial change since your last encounter 3️⃣ Confident Reengagement: Don't beg, but assertively inform them of your new round and interest from other parties. Make them reconsider their old opinions! Make sure to check out the full episode to hear all of my thoughts, I do these short episodes every week! Feel free to leave me some ideas to cover in the comments listen to the full ep 🎧👇

Founders, how many of you have found yourself knee-deep in tasks that feel productive but actually sidetrack your growth? A few days ago I dropped a new episode on @FundedPod on the art of "productive procrastination" and how to tell if you're stuck in its trap. Former engineers and builders turned founders, this is for you. Key takeaways from the episode: 💡Prioritize Impactful Tasks: Identify tasks that truly move the needle for your company. Don't get swayed by tasks that seem productive but don't propel you forward. Focus on what matters most! 💡Distinguish Fun from Essential: Not all tasks that feel enjoyable are the most critical. Stay mindful of the tasks that genuinely push your business closer to success, even if they're not as exciting. 💡Leverage Support: Recognize your strengths and seek help where needed. Whether it's delegating tasks to your team or getting external support, embrace the power of collaboration. It's a strength, not a weakness! Check out the full episode for all the insights. See you guys next week on The Backchannel! listen to the full ep 🎧👇

Brought @tiffmkell, one of the grittiest founders I’ve met, onto the podcast to talk about her crazy experience raising her seed round… you’re gonna wanna watch this one. Episode out now

@talentdotcom has over 30 million jobs available in over 75 countries They've established themselves as one of the largest sources of employment worldwide Last March, they raised $120M for their Series B Here's @lucas_martinez's advice on @fundedpod for founders raising VC $:

I'm constantly reminded of something I hope more founders take to heart... Yesterday it came from 3 long convos with different founders. 2 @fundedpod interviews (1 Series A co and one Series B co) and a dinner with a pre-seed founder Great fundraises come from great preparation....and that preparation can be transformational. Sometimes it looks like the tail wagging the dog, but whatever the case may be ... after a diligent fundraise prep you come out with a better company

474 founders have registered for my free 3-day Fundraising Workshop that starts tomorrow Why so much interest? VC luminaries @dunkhippo33 + @MacConwell are joining me to share solutions to a widespread founder problem 👇

Last year, an investor friend of mine suggested I meet @deenashakir and prefaced the intro w/ some of the highest praise I've heard in a while Fun to hear her name come up in my @fundedpod interview w/ @guyfriedman about his @steadymd fundraise ...with even bigger compliments!

Just got done listening to the final edit of our @fundedpod episode on @MsErinCarpenter + @NudeBarre Not an exaggeration to say it’s my fav episode yet It features 10 yrs of bootstrapping, @serenawilliams @jason @freestylevc and more 👀 So excited to release this one tmrw!!

Startup fundraising is a dark art Until recently, nobody's ever tried to systematically teach it to founders On Fri, @gaganbiyani and I are going to discuss how & why we're breaking that mold with my upcoming course on Maven.com Join us! lu.ma/5nvvhku3

Want my investor outreach pack including email templates, outreach playbook, and 14k+ investor names sorted by category for free? Just: 1. Retweet this 2. Comment "Sweet!" below And I will DM it to you (so many hours of internet research and testing went into this!)