Previously we walked through dilution with a simple cap table. Simple in this case means that every round on the table is an up round, and it ignores ESOPs, discounts, warrants, valuations, and multiple terms that can be set in an investment.
Let’s talk dilution – financial, not chemical. In finance, dilution is the decrease in percent equity held by investors’ shares by the addition of a new investment.
For each round of funding a startup takes on, the available number of shares increases. Therefore, while the number of shares held by a given person or party remains the same, the total number of shares outstanding increases, which shifts the percentage of equity held.
A big idea’s enough to start a business plan, but to actually build a company, you’re generally going to need some cold, hard capital. So here are the big questions for all founders without an existing war chest:
Welcome to Part II of our series on startup finance!
This week we'll be talking about a crucial skill for startup founders: understanding and identifying Key Performance Indicators (KPIs). KPIs are best thought of as a variety of metrics that indicate a company's progress. Utilizing them intelligently can make all the difference between crafting a data-driven, fundamentally sound growth strategy and shooting in the dark.
Welcome to the first post of LookFar’s brand new finance breakdown!
Over the next several weeks, I’ll be covering a range of startup topics with a particular focus on determining your fundraising needs and getting you in shape to negotiate your first round.