Startup Fundraising Engine

Score interpretation:

• 14-16: Ready to raise. Start immediately.
• 10-13: Almost ready. Fix gaps in 2-4 weeks, then launch.
• 6-9: Not ready. Build more traction first. Raising now will damage your reputation.
• 0-5: Too early. Focus on product and initial customers.

Fundraising Strategy Brief

fundraising_brief:
  company_name: ""
  stage: "" # pre-seed | seed | series-a | series-b
  current_arr_or_mrr: ""
  growth_rate_mom: "" # month-over-month
  team_size: 0
  months_of_runway: 0
  target_raise: "" # dollar amount
  target_valuation: "" # pre-money
  use_of_funds:
    engineering: "" # percentage + headcount
    sales_marketing: ""
    operations: ""
    runway_extension: ""
  timeline:
    start_date: ""
    target_close: "" # aim for 8-12 weeks
  key_metrics:
    customers: 0
    revenue: ""
    growth_rate: ""
    retention: ""
    burn_rate: ""

Stage-Appropriate Raise Guide

Raise-or-Don't Decision Framework

Raise NOW if:

• You have <6 months runway AND strong metrics
• A clear use of funds would unlock 3-5x growth
• Market timing is favorable (hot sector, strong VC appetite)
• You have warm investor interest

DON'T raise if:

• You can bootstrap to profitability in 6-12 months
• Metrics aren't strong enough (raising on weak numbers = bad terms)
• You're raising because "everyone else is" (worst reason)
• You haven't talked to 10+ potential investors informally first

Phase 2: Investor Targeting & Pipeline

Investor Selection Criteria

Score each potential investor 1-5:

Target List Architecture

investor_target:
  name: ""
  firm: ""
  title: ""
  email: ""
  linkedin: ""
  twitter: ""
  
  fit_score: 0 # 1-30 (sum of weighted dimensions)
  
  stage_focus: "" # pre-seed | seed | series-a | series-b | multi-stage
  sector_focus: [] # fintech, saas, health, etc.
  typical_check: "" # $500K-$2M
  recent_deals: [] # last 3-5 investments
  
  warm_path: "" # who can intro you?
  connection_strength: "" # strong | medium | weak | cold
  
  status: "" # researching | outreach | meeting | dd | term-sheet | pass | closed
  last_contact: ""
  next_action: ""
  notes: ""

Pipeline Sizing Rules

Conversion benchmarks:

• Cold outreach → meeting: 5-10%
• Warm intro → meeting: 30-50%
• Meeting → second meeting: 30-40%
• Second meeting → term sheet: 10-20%
• Term sheet → close: 70-90%

Tiering Strategy

Tier 1 (Dream investors, 5-8): Your ideal lead investors. Don't pitch them first — practice on Tier 3.

Tier 2 (Strong fit, 15-20): Good stage/sector fit. Many will become your actual lead.

Tier 3 (Practice + optionality, 20-30): Reasonable fit. Use for pitch practice and creating momentum.

Tier 4 (Followers, 10-20): Angels, smaller funds. Good for filling out the round after lead is set.

CRITICAL RULE: Pitch Tier 3 first (weeks 1-2), then Tier 2 (weeks 2-3), then Tier 1 (weeks 3-4). By the time you hit your dream investors, your pitch is sharp and you may already have term sheets.

Phase 3: Pitch Deck Construction

The 12-Slide Framework

Every great pitch deck follows this structure. Each slide has ONE job.

Slide 1: Title

• Company name + one-line description
• Your name, title, contact
• "We help [customer] do [outcome] by [how]"

Slide 2: Problem

• Paint the pain. Make the investor FEEL it.
• Use a specific story or example, not abstract stats
• "Today, [persona] struggles with [specific pain]"
• Show the cost of the problem (time, money, opportunity)

Slide 3: Solution

• Your product in 2-3 sentences
• Screenshot or demo GIF (visual > words)
• Focus on the "magic moment" — the thing that makes people say "wow"
• DO NOT list features. Show the transformation.

Slide 4: Why Now

• What changed that makes this possible/necessary TODAY?
• Technology shift? Regulatory change? Behavior change? Market timing?
• This is the most underrated slide. Nail it.

Slide 5: Market Size

• TAM → SAM → SOM (bottoms-up, NOT top-down)
• Show your math: [# of target customers] × [annual contract value] = SAM
• SAM should be $1B+ for VC-scale
• Show the growth trajectory of the market

Slide 6: Product / How It Works

• 3-step process or simple diagram
• Make it feel inevitable and obvious
• If you need more than 3 steps, simplify

Slide 7: Traction

• THE most important slide after Seed stage
• Revenue graph (up and to the right)
• Key metrics: ARR, MRR growth, customers, retention, NPS
• Logos of notable customers
• If pre-revenue: waitlist, LOIs, pilot results, engagement metrics

Slide 8: Business Model

• How you make money (clearly)
• Pricing model + unit economics
• ACV, gross margin, LTV/CAC, payback period
• Expansion revenue potential

Slide 9: Competition

• 2x2 matrix (NOT a feature comparison table)
• Your axes should be the dimensions where you win
• Show why you're in the top-right quadrant
• Mention "why not just use X?" for the obvious alternatives

Slide 10: Team

• Founder photos + relevant experience
• Why THIS team for THIS problem?
• Highlight: domain expertise, previous exits, technical depth
• Key hires made + key hires planned

Slide 11: The Ask

• How much you're raising
• Use of funds (3-4 categories max)
• What milestones this gets you to
• "This round gets us to [milestone] which positions us for [next round]"

Slide 12: Appendix (optional)

• Detailed financials
• Product roadmap
• Additional metrics
• Customer testimonials

Pitch Deck Quality Checklist

• Total slides: 10-15 (12 ideal)
• Each slide has ONE key message
• Can be understood in 3 minutes without narration
• Fonts are readable at projection size (24pt minimum)
• Consistent design (colors, fonts, layout)
• No walls of text (max 30 words per slide)
• Traction slide has real numbers, not vanity metrics
• Market size is bottoms-up with shown math
• Ask is specific (amount + use of funds + milestones)
• Team slide shows founder-market fit

The 60-Second Elevator Pitch

[Company] helps [specific customer] solve [specific problem].

Today, [customer] has to [painful current state], which costs them [quantified pain].

We built [solution] — a [category] that [key differentiator]. 

In [timeframe], we've [best traction metric]. We're growing [growth rate].

We're raising [amount] to [key milestone]. [Firm name] would be a great fit because [specific reason].

Phase 4: Outreach & Meeting Strategy

Warm Introduction Template

To the connector:

Hi [Name],

I'm raising a [seed/Series A] round for [Company] — we're [one-line description].

We've [best traction metric] and growing [rate]. I noticed [Investor Name] at [Firm] recently invested in [similar company] and thought there could be a strong fit.

Would you be comfortable making an intro? I've drafted a forwardable blurb below.

[Forwardable blurb — 3-4 sentences about the company, traction, what you're raising]

Really appreciate it either way.

Cold Outreach Template (last resort)

Subject: [Company] — [one compelling metric]

Hi [Investor first name],

[One sentence about why you're reaching out to THEM specifically — recent investment, blog post, tweet].

I'm building [Company] — [one-line description]. We're at [best metric] and growing [rate] MoM.

Would love 20 minutes to share what we're seeing in [market]. Happy to work around your schedule.

[Your name]
[Company] | [website]

Cold outreach rules:

• NEVER send identical emails to multiple investors
• Reference something specific about THEM (shows research)
• Lead with your BEST metric
• Keep under 100 words
• Send Tuesday-Thursday, 8-10 AM their timezone

First Meeting (30 min) Playbook

Structure:

• 0-2 min: Rapport + agenda setting
• 2-15 min: Walk through pitch (abbreviated — they've seen the deck)
• 15-25 min: Q&A (this is where the real evaluation happens)
• 25-28 min: Your questions for them
• 28-30 min: Next steps

Your questions for them (ask 2-3):

1. "What would you need to see to get conviction on this?"
2. "What's your typical decision timeline?"
3. "How do you typically work with portfolio companies post-investment?"
4. "What's your current fund deployment status?"
5. "Who else on your team would be involved in the decision?"

After the meeting (within 2 hours):

• Send thank you + any materials they requested
• Note their concerns — address in follow-up
• Update your CRM with status + next action

Investor Objection Response Framework

Phase 5: Financial Model & Projections

3-Statement Model Essentials

Investors expect a 3-5 year financial model. Keep it simple but defensible.

financial_model:
  revenue_assumptions:
    current_arr: ""
    growth_rate_year1: "" # conservative
    growth_rate_year2: ""
    growth_rate_year3: ""
    acv: ""
    new_customers_per_month: ""
    churn_rate_annual: ""
    expansion_rate: ""
    
  cost_assumptions:
    cogs_percentage: "" # target <30% for SaaS
    engineering_headcount: [] # by quarter
    sales_headcount: []
    g_and_a_headcount: []
    avg_salary_eng: ""
    avg_salary_sales: ""
    marketing_spend_percentage: "" # of revenue
    
  key_outputs:
    gross_margin: "" # target >70% SaaS
    burn_rate_monthly: ""
    runway_months: ""
    breakeven_date: ""
    arr_at_next_raise: ""

Revenue Projection Rules

1. Bottom-up only. [# sales reps] × [deals/rep/month] × [ACV] = revenue. NOT "if we get 1% of the market."
2. Show your assumptions. Every number should trace back to a testable assumption.
3. Three scenarios. Conservative (60% probability), Base (30%), Optimistic (10%). Present Base, have Conservative ready.
4. Growth rate benchmarks:

Unit Economics Deep Dive

unit_economics:
  ltv:
    arpu_monthly: 0
    gross_margin: 0.0  # percentage
    churn_monthly: 0.0  # percentage
    formula: "ARPU × Gross Margin / Monthly Churn"
    result: 0
    
  cac:
    total_sales_marketing_spend: 0  # last quarter
    new_customers_acquired: 0  # last quarter
    formula: "S&M Spend / New Customers"
    result: 0
    
  ltv_to_cac_ratio: 0  # target >3x
  cac_payback_months: 0  # target <18 months
  
  health_check:
    ltv_cac_above_3x: false
    payback_under_18_months: false
    gross_margin_above_70: false
    net_dollar_retention_above_100: false

Health benchmarks (SaaS):

Phase 6: Term Sheet Negotiation

Key Term Sheet Components

term_sheet:
  economics:
    pre_money_valuation: ""
    investment_amount: ""
    post_money_valuation: ""  # pre + investment
    price_per_share: ""
    shares_issued: ""
    
  control:
    board_seats:
      founders: 0
      investors: 0
      independent: 0
    protective_provisions: [] # list of investor veto rights
    
  liquidation:
    preference: "" # 1x non-participating (standard) | 1x participating | 2x
    participation_cap: "" # if participating
    
  anti_dilution: "" # broad-based weighted average (standard) | full ratchet (bad)
  
  pro_rata_rights: true  # investors right to maintain ownership %
  
  vesting:
    founder_vesting: "" # 4 years, 1 year cliff (standard)
    acceleration: "" # single trigger | double trigger | none
    
  other:
    option_pool: "" # 10-15% post-money (negotiate pre vs post)
    drag_along: true
    right_of_first_refusal: true
    information_rights: true
    no_shop_period: "" # 30-60 days typical

Term Sheet Red Flags 🚩

Negotiation Playbook

Rule 1: Optimize for valuation LAST. The order of importance:

1. Amount raised (enough runway for 18-24 months)
2. Board composition (maintain founder control early)
3. Liquidation preferences (1x non-participating)
4. Anti-dilution protection (broad-based weighted average)
5. Valuation (important but not #1)

Rule 2: Get multiple term sheets. BATNA is everything. Even one competing offer changes the dynamic completely.

Rule 3: Negotiate the option pool. If they want 15% post-money, that dilutes YOU more than them. Push for smaller pool or post-money sizing.

Rule 4: Understand the math.

Founder ownership = 1 - (investor_shares + option_pool) / total_shares
Example: $5M pre + $2M raise + 10% pool
- Post-money: $7M
- Investor owns: $2M / $7M = 28.6%
- Pool: 10%
- Founders: 61.4%

With 15% pool pre-money:
- "Pre-money" is really $5M - 15% = $4.25M effective
- Investor owns: $2M / $6.25M = 32%
- Pool: 15%
- Founders: 53% ← see the difference?

Rule 5: Get a good lawyer. Don't negotiate term sheets yourself. Startup lawyers (Cooley, Wilson Sonsini, Gunderson, Orrick) know what's standard. Budget $15-30K for a priced round.

Word-for-Word Negotiation Scripts

On valuation: "We've seen comparable companies at our stage and traction level — [example 1], [example 2] — raise at [X] to [Y] pre-money. Given our [specific metric that's strong], we believe [your number] reflects fair value. What's driving your thinking on valuation?"

On option pool: "We're happy with a 10% pool — that covers our hiring plan for the next 18 months. A 15% pool pre-money effectively reduces our valuation by [$ amount]. Could we either reduce the pool to 10% or calculate it post-money?"

On liquidation preference: "We'd prefer standard 1x non-participating. Participating preferred with a cap could work, but uncapped participation significantly changes the economics for founders and early employees in moderate outcomes."

On board seats: "At this stage, we think a 3-person board with 2 founders + 1 investor makes sense. We'd love your input and governance, but founder control is important to us while we're still finding our groove."

Phase 7: Due Diligence Preparation

DD Readiness Checklist

Prepare these BEFORE you start fundraising. Scrambling during DD kills deals.

Corporate Documents

• Certificate of incorporation (Delaware C-Corp preferred)
• Bylaws
• Board minutes (all meetings)
• Stockholder agreements
• Cap table (fully diluted, option grants, vesting schedules)
• 83(b) election filings for all founders
• State registrations / qualifications

Financial

• Financial statements (last 2 years + YTD)
• Bank statements (last 12 months)
• Tax returns (federal + state, last 2 years)
• Revenue by customer (concentration analysis)
• Accounts receivable aging
• Budget vs actuals
• Financial model (3-5 year projections)

IP & Technology

• Patent filings / applications
• Trademark registrations
• IP assignment agreements (ALL employees + contractors)
• Open source usage audit
• Technology architecture overview
• Security audit / SOC 2 status

Team & HR

• Employee list with titles, start dates, compensation
• Employment agreements (all employees)
• Contractor agreements (all contractors)
• Option grant schedule
• Benefits summary
• Key person dependencies

Legal

• Customer contracts (template + material contracts)
• Vendor agreements (material)
• Pending / threatened litigation
• Regulatory compliance status
• Privacy policy + terms of service
• Insurance policies

Metrics

• Monthly revenue / ARR waterfall (last 12+ months)
• Cohort retention data
• Unit economics (LTV, CAC, payback)
• Pipeline / bookings data
• NPS / customer satisfaction data
• Churn analysis by cohort

Data Room Organization

📁 Data Room/
├── 📁 1-Corporate/
│   ├── Certificate_of_Incorporation.pdf
│   ├── Bylaws.pdf
│   ├── Board_Minutes/
│   └── Cap_Table_[date].xlsx
├── 📁 2-Financial/
│   ├── Financial_Statements/
│   ├── Tax_Returns/
│   ├── Bank_Statements/
│   └── Financial_Model_[date].xlsx
├── 📁 3-IP_Technology/
│   ├── IP_Assignments/
│   ├── Architecture_Overview.pdf
│   └── Security_Audit.pdf
├── 📁 4-Team_HR/
│   ├── Org_Chart.pdf
│   ├── Employment_Agreements/
│   └── Option_Grants.xlsx
├── 📁 5-Legal/
│   ├── Customer_Contracts/
│   ├── Vendor_Agreements/
│   └── Insurance_Policies/
├── 📁 6-Metrics/
│   ├── Monthly_Metrics_Dashboard.xlsx
│   ├── Cohort_Analysis.xlsx
│   └── Pipeline_Report.xlsx
└── 📁 7-Pitch_Materials/
    ├── Pitch_Deck_[date].pdf
    ├── Executive_Summary.pdf
    └── Product_Demo_Link.md

Phase 8: Cap Table Management

Cap Table Fundamentals

cap_table:
  company: ""
  date: ""
  total_authorized_shares: 10000000
  
  common_stock:
    - holder: "Founder 1"
      shares: 0
      vesting: "4yr/1yr cliff"
      vested_shares: 0
      percentage: 0.0
    - holder: "Founder 2"
      shares: 0
      vesting: "4yr/1yr cliff"
      vested_shares: 0
      percentage: 0.0
      
  preferred_stock:
    - round: "Seed"
      investor: ""
      shares: 0
      price_per_share: 0.0
      amount_invested: 0
      percentage: 0.0
      liquidation_preference: "1x non-participating"
      
  option_pool:
    total_reserved: 0
    granted: 0
    exercised: 0
    available: 0
    percentage_of_fully_diluted: 0.0
    
  fully_diluted_shares: 0  # common + preferred + all options

Dilution Math Every Founder Must Know

Round-by-round dilution example:

Key insight: After a typical Seed + Series A, founders often own 50-60%. This is NORMAL. The goal isn't to minimize dilution — it's to maximize the value of your remaining shares.

$100M exit at 55% ownership = $55M. $500M exit at 40% ownership = $200M. Take the dilution that unlocks the bigger outcome.

Pro-Rata Rights

Pro-rata rights let existing investors maintain their ownership percentage in future rounds.

When it matters: If a Seed investor has 15% and doesn't participate pro-rata in Series A, they get diluted to ~12%. With pro-rata, they invest enough to maintain 15%.

Founder impact: More pro-rata participation = less room for new investors = potential conflict. Manage this by setting clear allocation frameworks.

Phase 9: Fundraising Process Management

The Fundraising Sprint (8-12 Week Framework)

Weeks 1-2: Preparation

• Finalize pitch deck
• Build financial model
• Set up data room
• Build target list (50-80 investors)
• Write outreach templates
• Request warm intros (takes 1-2 weeks to materialize)

Weeks 3-4: Tier 3 + Early Tier 2 Meetings

• Practice pitch with 10-15 investors
• Refine based on questions and feedback
• Identify common objections, prepare responses
• Update deck based on learnings

Weeks 5-6: Tier 1 + Tier 2 Meetings

• Pitch your dream investors with a polished deck
• Create urgency with momentum ("we have 3 partner meetings next week")
• Share any early interest/term sheets (carefully)

Weeks 7-8: Term Sheets + Negotiation

• Receive and compare term sheets
• Negotiate key terms
• Check investor references (CRITICAL — call 3-5 portfolio founders)
• Select lead investor

Weeks 9-12: Close

• Finalize legal docs with lawyers
• Fill remaining allocation (angels, smaller checks)
• Wire transfer + board setup
• Announce (if desired)

Weekly Pipeline Dashboard

fundraising_pipeline:
  week: 0
  date: ""
  
  funnel:
    total_targets: 0
    outreach_sent: 0
    meetings_scheduled: 0
    meetings_completed: 0
    second_meetings: 0
    partner_meetings: 0
    term_sheets: 0
    
  conversion_rates:
    outreach_to_meeting: 0.0
    meeting_to_second: 0.0
    second_to_partner: 0.0
    partner_to_ts: 0.0
    
  momentum_signals:
    - "" # "3 partner meetings scheduled for next week"
    
  concerns:
    - "" # "Common pushback on market size"
    
  next_week_actions:
    - ""

Follow-Up Cadence

Monthly Investor Update Template

Subject: [Company] — [Month] Update: [headline metric]

Hi [Name],

Quick update on [Company]:

📈 Key Metrics
• ARR: $X (+Y% MoM)
• Customers: X (+Y new)
• [Key operational metric]: X

🏆 Wins
• [Biggest win this month]
• [Second win]

🔥 Challenges
• [Honest challenge — shows self-awareness]

🎯 Next Month
• [Key goal 1]
• [Key goal 2]

We're raising [amount] — happy to chat if this is interesting.

Best,
[Name]

Investor update rules:

• Send monthly, even before you're raising
• Be honest about challenges (builds trust)
• Keep under 200 words
• Include 1-2 specific metrics with trajectory
• Send to everyone — passed investors sometimes come back

Phase 10: Post-Close & Governance

First 30 Days After Close

• Set up board meeting cadence (quarterly)
• Send announcement to team, customers, press (if desired)
• Update cap table and legal docs
• Set up board reporting package
• Have 1:1 onboarding with each board member
• Begin hiring per use-of-funds plan
• Set up monthly investor update cadence

Board Meeting Template

board_meeting:
  date: ""
  duration: "90 minutes"
  
  agenda:
    - topic: "CEO Update"
      duration: "15 min"
      content: "High-level strategy, key decisions, morale"
      
    - topic: "Financial Review"
      duration: "15 min"
      content: "Revenue, burn, runway, budget vs actual"
      
    - topic: "Product & Metrics"
      duration: "15 min"
      content: "Key metrics, product roadmap, customer feedback"
      
    - topic: "Deep Dive Topic"
      duration: "20 min"
      content: "One strategic topic for board input (GTM, hiring, partnerships)"
      
    - topic: "Open Discussion"
      duration: "15 min"
      content: "Board member questions, concerns, opportunities"
      
    - topic: "Closed Session"
      duration: "10 min"
      content: "Exec compensation, sensitive matters"

Board Package (Send 3 Days Before Meeting)

Phase 11: Alternative Fundraising Strategies

SAFE Notes (Pre-Seed / Seed)

When to use: Pre-seed and seed when speed matters more than precision.

SAFE best practices:

• Use Y Combinator standard SAFE (don't modify)
• Post-money SAFEs are now standard (clearer dilution math)
• Stack no more than $2-3M in SAFEs before pricing a round
• Track ALL SAFEs in your cap table (they WILL convert)

Revenue-Based Financing

When to use: You have revenue but don't want to give up equity.

Venture Debt

When to use: Extend runway between equity rounds without dilution.

• Typical terms: 2-3 year term, interest + warrants (0.5-2% of equity)
• Usually available after Series A (sometimes Seed)
• DON'T use venture debt as a substitute for equity — use it as a supplement
• Rule: Never take venture debt that represents >25% of your last equity raise

Quality Scoring

100-Point Fundraising Readiness Rubric

Weighted score = Σ (weight × score × 10)

Common Mistakes

Edge Cases

First-Time Founder

• Lean on advisors who've raised before
• Consider an accelerator (YC, Techstars) for credibility + network
• Accept slightly lower valuation for a great investor with strong brand
• Double your timeline estimates — everything takes longer the first time

Down Round

• Try alternatives first: bridge round, extension, venture debt
• If unavoidable: negotiate pay-to-play provisions (forces all investors to participate)
• Communicate proactively with existing investors — no surprises
• Reframe the narrative: "We're resetting to grow sustainably"

Bootstrapped → First Raise

• Lead with your profitability story (rare and valuable)
• You have MASSIVE leverage — you don't NEED the money
• Negotiate from strength: higher valuation, better terms, board control
• Consider raising a small round ($1-2M) to test the VC relationship

Founder Solo (No Co-Founder)

• Address it head-on: "I'm looking for my #2 — this round funds that search"
• Show strong advisors / early team members
• Demonstrate extreme execution velocity as proof you can recruit
• Consider finding a co-founder before raising (strongest signal)

International Founder (Non-US)

• Incorporate in Delaware (non-negotiable for US VCs)
• Use Stripe Atlas, Clerky, or Firstbase for setup
• Consider US-based angels first for credibility
• Time zone overlap with US investors matters — schedule accordingly

Natural Language Commands

When this skill is active, the agent responds to:

1. "Assess my fundraising readiness" → Run Phase 1 assessment
2. "Build my investor target list" → Phase 2 pipeline creation
3. "Review my pitch deck" → Phase 3 quality checklist
4. "Draft investor outreach" → Phase 4 templates
5. "Build my financial model" → Phase 5 projections
6. "Analyze this term sheet" → Phase 6 red flag analysis
7. "Prepare my data room" → Phase 7 checklist
8. "Calculate dilution for [amount] at [valuation]" → Phase 8 math
9. "Plan my fundraising sprint" → Phase 9 timeline
10. "Prepare my board meeting" → Phase 10 package
11. "Compare SAFE vs priced round" → Phase 11 alternatives
12. "Score my fundraising readiness" → Quality rubric

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