Fundraising
The Founder Fundraising Playbook
Stage-by-stage guidance built from reviewing thousands of VC pitches. Know what investors really want — and what kills deals.
Seed Overview
Product exists, early users. Investors want proof you understand your customer.
Do This
- ✓Quantify retention — weekly/monthly cohorts beat everything
- ✓Get 3–5 warm intros from portfolio founders of target VCs
- ✓Run a tight process: 4–6 week sprints with term sheet deadline
- ✓Build FOMO — parallel conversations, don't go sequential
- ✓Prepare data room before first meeting (contracts, metrics, cap table)
Avoid
- ✗Don't raise while building — batch fundraising saves 3 months
- ✗Don't accept first term sheet without competitive process
- ✗Don't let VCs string you along with 'we're still deciding'
- ✗Don't optimize for highest valuation if it sets unrealistic Series A bar
Who Invests
Resources
VCs at this stage
Browse Seed VCs →Pitch Deck Checklist
Company Overview
- □1-line description
- □Mission statement
- □Product demo link or screenshots
Problem & Solution
- □Market pain point with data
- □Current alternatives and their failures
- □Your unique solution
Traction
- □MRR/ARR with month-over-month growth
- □Number of customers and logos
- □Net revenue retention
- □Cohort retention chart
- □CAC and LTV (directionally)
Market
- □TAM/SAM/SOM with sources
- □Bottom-up market sizing (not top-down)
- □Macro tailwinds driving the market
Business Model
- □Revenue model (subscription, transaction, usage)
- □Pricing page or strategy
- □Gross margins (target: 60%+ for SaaS)
Team
- □Founders and key hires with bios
- □Domain expertise / unfair advantages
- □Key gaps you're hiring for with the round
Use of Funds
- □Specific allocation of raise
- □Milestones this capital gets you to
- □Next round criteria
Financials
- □P&L last 12–24 months
- □3-year projection (bottoms-up)
- □Burn rate and runway
Term Sheet Glossary
SAFE
Simple Agreement for Future Equity. Common pre-seed instrument. No valuation negotiation, converts at Series A.
Convertible Note
Debt that converts to equity. Has interest rate (typically 5–8%) and maturity date. Less founder-friendly than SAFE.
Pre-money valuation
Company value BEFORE the new investment. Post-money = pre-money + new investment.
Option Pool
Reserved shares for employee equity. Usually 10–20% created BEFORE new round — comes out of founder ownership.
Pro-rata rights
Investor's right to maintain ownership % in future rounds. Fight to limit this if too many investors have it.
Participating preferred
Investor gets money back THEN shares in remaining proceeds. Toxic in most cases — push for non-participating.
Liquidation preference
Investors get paid before founders in exit. 1x non-participating is standard and fine. >1x is a red flag.
Anti-dilution
Protects investors if you raise at lower valuation (down round). Broad-based weighted average is standard.
Board composition
Who controls decisions post-investment. Protect founder control: 2 founders, 1 VC, 1 independent at Seed-A.
Information rights
Investors' right to monthly/quarterly financials. Standard. Make sure to carve out competitors.
Pay-to-play
Investors lose preferred status if they don't invest in future rounds. Good for founders, VCs hate it.
QSBS
Qualified Small Business Stock. 100% federal tax exclusion on gains up to $10M for early investors AND founders.
Common Questions
Research your investors before you pitch
Check ghosting rates, term fairness scores, and founder reviews before wasting time in a process.