Venture Capital Archives - Angel Investors

08/25/2025

Post-Investment Relationships: The Key to Startup Success

Receiving venture capital (VC) funding is a monumental milestone for any startup. It’s often celebrated as the “finish line,” but in reality, it’s just the starting gun. The post-investment relationship with your VCs is a crucial, ongoing partnership that can make or break your company’s growth trajectory. It’s a dynamic that requires as much strategic thought and effort as the fundraising process itself.

The Shift from Transaction to Partnership

Before the investment, the relationship with a VC is a negotiation, a pitch, and a vetting process. The focus is on convincing them of your business’s potential. Once the check clears, the dynamic shifts. Your investor is no longer just a source of capital; they’re a partner with a vested interest in your success. They want to see you succeed because it directly impacts their own returns. This shared objective is the foundation of a strong post-investment relationship.

The value a VC brings goes far beyond the money. Their expertise, network, and guidance can be invaluable. A good VC will act as a strategic advisor, helping you navigate challenges, make key hires, and connect with potential partners or customers. By leveraging their experience, you can avoid common pitfalls and accelerate your growth.

Best Practices for Building a Strong Relationship

A healthy founder-VC relationship is built on a few core principles. Founders who master these are more likely to thrive in the long run.

1. Communication is King

This is the most critical element. Transparent and regular communication is the bedrock of trust. Don’t just share the good news; be open about challenges, setbacks, and what you’re learning along the way. Investors appreciate honesty and are often more willing to help when they’re kept in the loop.

Establish a rhythm: Agree on a regular cadence for updates, whether it’s monthly or quarterly.
Create a clear format: Your updates should be concise and easy to digest. Include key performance indicators (KPIs), highlights, lowlights, and specific requests for help. Use data to tell your story.
No surprises: The last thing a VC wants is to be blindsided by bad news at a board meeting. Address issues early and proactively.

2. Leverage Their Network and Expertise

Your VC’s network is a powerful resource. Don’t be shy about asking for introductions. They can connect you with potential customers, future investors for a new funding round, or top-tier talent. They also bring a wealth of strategic knowledge from their experience with other portfolio companies.

Ask for specific help: Instead of a generic “How can you help?” be specific. “We’re looking to hire a Head of Marketing with experience in B2B SaaS. Do you know anyone?” is much more actionable.
Seek advice on strategic decisions: Involve your investors in discussions about major strategic shifts, like entering a new market or launching a new product. Their input can provide a fresh perspective and help you de-risk important decisions.

Common Pitfalls to Avoid

Even with the best intentions, the founder-VC relationship can sour. Recognizing and avoiding common mistakes is just as important as implementing best practices.

Going silent: Silence breeds suspicion. When VCs don’t hear from you, they often assume the worst. Regular updates, even brief ones, can prevent this.
Hiding bad news: It’s tempting to put a positive spin on everything, but hiding problems only erodes trust. Being transparent about setbacks demonstrates maturity and gives your investors a chance to help.
Treating them as a bank: Your VC is not just a source of cash. Neglecting to involve them in strategic discussions and only reaching out when you need more money or are in trouble can damage the relationship.
Disregarding their input: While you are the ultimate decision-maker, dismissing a VC’s advice without consideration can make them feel disrespected and disengaged. Be open to feedback and have a thoughtful dialogue.

A strong post-investment relationship is a two-way street. By being transparent, proactive, and collaborative, you can transform your investors from passive capital providers into active partners who are genuinely invested in your journey. This partnership is one of the most valuable assets a startup can have and nurturing it is a key ingredient for long-term success.

Who we are: Funded.com is a platform that is A+ BBB accredited over 10+ years. Access our network of Angel Investors, Venture Capital or Lenders. Let us professionally write your Business Plan.

07/07/202507/07/2025

Navigating the Complexities of Venture Capital Funding

Venture capital funding can be both a dream and a daunting challenge for startups. On one hand, it offers the financial muscle to scale rapidly, but on the other, it brings complex expectations, negotiations, and long-term commitments. Understanding how to navigate these complexities can make or break your startup journey.

What is Venture Capital Funding?

Venture capital (VC) funding is a form of private equity investment where investors provide capital to startups and small businesses with strong growth potential. These investments are typically exchanged for equity in the company. Unlike traditional loans, VC funding doesn’t need to be repaid if the business fails, but it does come with strings attached.

Why Startups Seek Venture Capital

Startups usually pursue VC funding to:

Accelerate product development
Expand their team and operations
Enter new markets quickly
Leverage investor networks and expertise

VCs are not just about money—they often bring invaluable strategic guidance and mentorship, especially from seasoned investors or industry veterans.

Stages of Venture Capital Funding

Venture capital funding usually happens in stages:

Seed Stage: The earliest stage; usually involves developing the product and testing market viability.
Series A: Focused on scaling the product and growing the user base.
Series B, C, and Beyond: Aimed at large-scale expansion, entering global markets, or preparing for IPOs.

Each stage demands more proof of business viability, traction, and scalability.

What Venture Capitalists Look For

Before funding, VCs meticulously analyze various aspects of your business, including:

Market Size: Is the opportunity large enough to support massive growth?
Scalability: Can the business model handle rapid expansion?
Team Strength: Are the founders and leadership capable and experienced?
Traction: Are there users, customers, or revenue to back the concept?
Exit Strategy: How will they get a return on their investment?

Having strong answers to these questions is crucial to attracting VC interest.

The Due Diligence Process

Due diligence is where the VC peels back the layers of your business. They’ll dig into your:

Financials (past performance and projections)
Legal structure
Intellectual property
Team dynamics
Customer testimonials

Be transparent, organized, and ready to provide documentation. Red flags at this stage can quickly turn a “yes” into a “no.”

Term Sheets and Negotiation

Once a VC decides to invest, they’ll issue a term sheet—a non-binding agreement outlining the investment terms. This includes:

Valuation: What your company is worth
Equity stake: How much ownership the VC will get
Board composition: Who gets voting rights and how many seats the VC will occupy
Liquidation preferences: What happens if the company is sold or goes bankrupt

Negotiating a fair term sheet is crucial. It’s highly advisable to consult a lawyer with startup or venture capital experience.

Common Pitfalls to Avoid

Over-raising or under-raising: Raising too much can dilute your equity. Too little can starve growth.
Not understanding the fine print: Many founders agree to unfavorable terms unknowingly.
Choosing the wrong VC: Not all money is good money. Choose investors who align with your vision and values.
Ignoring dilution: As you raise more rounds, your ownership stake decreases. Understand how much control you’re giving up.

Post-Investment Expectations

Once the money is in, the real work begins. VCs expect:

Regular updates and reporting
Milestone achievement
Professionalism and transparency
An eventual exit: IPO, acquisition, or another liquidity event

VCs aren’t your bosses, but they are stakeholders with high expectations and a timeline for returns.

Is Venture Capital Right for You?

VC isn’t for every startup. If your business isn’t scalable or doesn’t promise high growth, alternatives like bootstrapping, crowdfunding, or angel investors might be better fits. The VC route demands speed, scale, and sacrifice—especially in terms of equity and control.

Final Thoughts

Navigating the complexities of venture capital funding is like playing chess, not checkers. Every move counts, and preparation is key. Understanding what VCs want, being transparent, and negotiating wisely can help you turn funding into fuel for long-term success. When done right, VC funding can take your startup from idea to IPO.

Who we are: Funded.com is a platform that is A+ BBB accredited over 10+ years. Access our network of Angel Investors, Venture Capital or Lenders. Let us professionally write your Business Plan.

01/03/202501/31/2025

4 Things Venture Capitalists Do Not Want to Hear From Entrepreneurs

Securing financial support from a venture capitalist is not an easy task. Most of the time, only those who are considered the “best of the best” get the venture capital that they need. But does that mean it’s almost impossible to get one? Actually, it’s not. However, if you are really keen on closing the deal with your potential investor, you should work hard to present your business perfectly.

There are many articles that sum-up the things that entrepreneurs should say when given a chance to pitch their startups to venture capitalists. This article is different. Instead of giving tips on what entrepreneurs should say, it would list four things that business owners should avoid saying when dealing with potential business partners:

1. “We plan to sell the business as soon as possible.”

A lot of venture capitalists invest in businesses that have the potential of becoming large and meaningful. Unless they tell you that they want to make small money in a short time, don’t mention anything concerning a sellout in the next or two.

2. “It will be the next Facebook.”

Nobody stops you from dreaming. But reality dictates that less than one percent of business startups across the country make it half as big as Facebook. But if you’re really sure that yours will be successful, then explain how you plan to do that – and hope that your potential investor would agree with you.

3. “My family loves my idea.”

Of course, families love the idea of their members. Try getting the opinion of someone who is not related to you and is regarded as a top-notch individual in the industry that you’re working on.

4. “No one is competing with us.”

This is a promising line, considering that it has the capability to lure in potential investors to put some money on your business. The problem, however, is whether or not they will believe you. Most probably, they would not. Every business has competition, and failing to recognize yours would surely turn-off venture capitalists. Instead, identify your competition and outline the things that would make your business better than them.

Who we are: Funded.com is a platform that is A+ BBB accredited over 10+ years. Access our network of Angel Investors, Venture Capital or Lenders. Let us professionally write your Business Plan.

08/13/201406/28/2017

Basic Principle of Financing

Poor management is often referred to as the main factor of why businesses fail. Lacking or poorly timed financing is a nearby second. Whether you are a starting up business or expanding your business, adequate capital is important. Yet it is insufficient to essentially have enough financing; understanding and planning are necessary to control it well. These qualities will ensure business owners to avoid mistake like having a wrong type of financing, or underestimating the cost of borrowing money.

Ask yourself this question before inquiring about financing:

Do you need more capital or can you work on with your existing cash flow?
How do you characterize your need? Do you need the money because you want to expand? Or as a cushion against risk?
How vital is your need? You can get the best terms when you foresee your needs rather than looking for money under pressure.
How big is your risk? All businesses suffer from risks and danger, and the level of danger will influence expense and accessible financing plan B.
How strong is your management team? Management is the most important element surveyed by money sources.

Possibly most importantly, how does your need for financing mesh with your business plan? If you don’t have a business plan, make writing one your first priority. All capital sources will want to see your plan for the start-up and growth of your business.

Don’t assume all money is similar

There are two types of financing: equity and debt financing. If you are looking for money you should consider your business debt to equity ratio – the difference relatively concerning dollars you’ve borrowed along with dollars you’ve invested in your organization. The harder money masters include invested in the organization, the more it really is for you to entice loan.

If your company has an excessive percentage of equity to debt, you may want to seek debt financing but if your company has a high percentage of debt to equity, experts say you should increase your ownership capital for added funds. In this way you will not be over-leverage to the point of ruining your company’s welfare.

Equity Financing and Venture Capital

Most small scale businesses use limited equity financing but with debt financing, additional equity mostly come from non-professional investors like friends, relatives, employees or customers. However, the most common source of professional equity funding comes from venture capitals. These are institutional risk takers and may be groups of wealthy individuals, government-assisted sources, or major financial institutions. Most specialize in one or a few closely related industries.

Venture capitals are sometimes seen as deep-pocketed financial gurus looking for start-ups in which to invest their money, but they most often prefer three-to-five-year old companies with the potential to become major regional or national concerns and return higher-than-average profits to their shareholders. Venture Capitals earn money by owning equity in the companies it invests in. They generally prefer to influence a business passively, but will react when a business does not perform as expected and may insist on changes in management or strategy. Changing some of the decision-making and some of the potential for profits are the main disadvantages of equity financing.

Debt Financing

Banks, savings and loans, commercial finance companies, and the SBA are some of the sources for debt financing. State and the local government have come up with programs in the recent years to give encouragement to the growth of small business to help increase the economy. Family members, friends, and former associates are all potential sources, especially when capital requirements are smaller.

Banks traditionally have been the major source of small business funding. Their main role has been as a short-term lender offering demand loans, seasonal lines of credit, or single-purpose loans. Banks generally have been unwilling to offer long-term loans to small firms. The SBA guaranteed lending program encourages banks and non-bank lenders to make long-term loans to small firms by decreasing their risk and leveraging the funds they have available. The SBA’s programs have been an integral part of the success stories of thousands of firms nationally.

In addition to equity considerations, investors or lenders mostly require the borrower’s personal guarantees in case of default. This will assure that the borrower has a sufficient personal interest at stake to give attention to the business. For most borrowers this is a burden, but also an obligation.

More detailed information and useful advice can be found at Funded.com Created by Mark Favre, it offers expertise and assistance with developing and funding your concept, including a private forum for queries and discussions. If you need access to investors and funding providers, please do check our website.Funded.com
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06/09/201406/28/2017

Equity crowdfunding and venture capitalism: Why it matters?

The United States government has approved a landmark law for entrepreneurs, especially those involved in the small and medium enterprises sector, in 2012. Known as the Jumpstart Our Business Startup – or JOBS – Act of 2012, the legislation enables startups to raise as much as one million dollars through various websites that will be established following the implementation of the law.

There are a number of people, both supporters and critics of JOBS Act, who argue that the law will affect the more traditional venture capitalists. They say that by providing support to crowd funding – or raising funds that come from different people to finance a business – the government essentially removed venture capitalists from the picture.

A number of people are happy with this possibility, but a whole lot more are shaking their heads. After all, venture capitalists, over a period of time, have made it possible for a lot of major businesses to flourish.

The reality, however, is that JOBS Act does not diminish the relevance of venture capitalism in the field of entrepreneurship. In fact, it can be argued that the law will strengthen the system and would enable more businesses to enter the arena. Here’s why:

Crowd funding and venture capitalism may end up having different clients

According to the law, the legislation will enable businesses to raise as much as one million dollars in capital through crowd funding that will be assisted by dedicated online portals. This in itself shows a major difference between the two funding sources.

Based on latest studies, the median of venture capitalist investments in the country in the past three months is at four million. This means that the clients of crowd funding and venture capitalism will come from different backgrounds as they will need different amounts of money.

Instead of “killing” venture capitalists, the law may have just given them the opportunity to find better deals as businesses that need smaller funding will have another platform for them to look for investments.

Crowd funding and venture capitalism are made for each other

These two are in fact a perfect match. With the existence of an established system of funding (i.e. crowd funding for smaller businesses and venture capitalism for slightly bigger ones), entrepreneurs will have an assurance that there will be support as their business grows.

Moreover, the existence of crowd funding system should not threaten or drive away venture capitalists as there are always businesses looking for investments. In fact, they can even use the portals to take part in crowd funding initiatives or scout possible partners that are looking for investments.

The nature of the legislation is to provide entrepreneurs – especially business startup owners – with an equal opportunity to look for people who may help them in establishing their businesses. While it is true that the law will create ripples and affect the already established system of funding in the United States, it is imperative for everyone to understand its objectives and see to it that it achieves its goals.

04/15/201306/28/2017

Available Corporate Venture Funds for Business Startups

In recent years, the number of available venture capital funds for business startups that are coming from traditional sources has started to go down. Fortunately, there is a viable alternative – corporate venture funds.

It can be noted that a several multinational corporations have started to allot some of their funds for business startups. Latest data show that roughly around 900 corporate venture funds are currently available for new businesses. Last year, around 16 percent of companies have acquired corporate venture capital, a number that is expected to increase this year.

Corporate venture funds have been available for more than two decades now. But recently, corporations have started to embrace this trend even if it would disrupt the status quo. The reason, they can’t afford not to anything about it.

Several companies have recently declared bankruptcy or have started to vanish because it failed to recognize the changing landscape of the market. For instance, rental company Blockbuster would still be a major player if it recognized startups such as Netflix. This is similar to the case of Kodak. If only it recognized newbies Shutterfly and Instagram, it might have averted declaring bankruptcy.

Fortunately for some companies, they still have time to catch up with the situation. Nielsen, for instance, has already allotted money to fund small investments. Dell is doing the same, maintaining that it will continue investing in startups even with plans for it to be taken private.

Corporate venture capital allows public company to focus on the long term. For instance, American Express Ventures will participate in merger of e-commerce and payments industries. It is also looking for new technologies that could be utilized for the next decade.

If you are an owner of a business startup who is in need of capital, then it is a good idea to look for venture funds from corporations. Securing one would be a good thing, especially since big companies could assure a successful future for your business startup.

03/26/201306/28/2017

Guidelines For Successful Postings

Rules and Guidelines For Successful Postings

Posting your Funding request is essential part of raising capital as creating your Business Plan. In order for you to get the funding you should be able to catch the eyes of the investors. Here are some tips you can follow to attract Investors and funding providers.

Title. Make your title attractive this is the first section our investors will see. Include the title of your business or invention. Make it enticing and give them something they want to hear and continue reading to your letter.

Posting. Write a short summary of your Business idea or Invention that will catch investor’s attention. Make it 2 to 3 paragraph short and make it concise and simple. Avoid too much information and do not copy and paste your Executive Summary. Your posting is not to be confused with a chat or blog. You are selling you and your business to investors and funding providers to raise capital and any posting that is not about your business is not allowed. Remember, concise and to-the-point.

Attach your Business Plan or Executive Summary. If you are looking for an Angel Investor or Venture Capital make sure you attach your Business Plan don’t wait for the investors to ask your Business Plan. Remember your Business Plan is the eye view of your business/invention. If you don’t have a Business Plan yet at least upload an executive summary. (You can use the Free Executive Summary template available upon creating your membership). This will give the investor the immediate reaction that you are serious in getting funds.

Private or Public posting. We have two ways of posting your request either public or private post. If you publically post be aware that everyone who not a member of funded.com will see your postings. While private posting only our registered investors and funding providers can see your funding request.

Avoid Personal Information. Even though we pre-screen funding providers, it is an ever increasingly large group and it is ultimately up to you to protect yourself from anyone saying who they are not and promptly reporting any concerns to us. Therefore we suggest not putting your email or telephone number on a public post. Private postings may not have the traffic like a public posting but is limited to our investor network that is viewing your funding request. Keep in mind that if there are investors that are interested in knowing your business venture they can always email you via funded.com and you will receive an email notification on your personal email if they replied on your posting.

Be patient for responses give some time to our investors to see your request. If you are not getting any responses try to re-write or revised your posting. You may also call us and we can look at your posting and give you tips for success. Try to be more creative and remember you want to create interest in your business or idea and sometime it takes time for investors and funding providers to notice you, especially the right one that will fund you.

01/21/201306/28/2017

Seven Tips on Raising Venture Capital for Business Startups

Raising Venture Capital for a business startup may be one of the most difficult challenges that an entrepreneur might encounter. After all, with the number of business startups out there, the competition for that precious venture capital may be really tough.

Here are some tips for business startup owners seeking to raise venture capital:

Decide on what you want to do – Having a business idea is different from having a business plan. While it is important to know what you want, you also need to know how you would execute your plans to achieve your objectives. Knowing this will increase your chances of securing venture capital.
Be ready for what happens – If you’re really serious with securing a venture capital, then you have to do whatever it takes to get it. This includes being ready to move to another location or sit in on trainings and other experience-building activities.
Invest on your team – The truth is, businesses are not just about its owners. Usually, the success depends on the entire team that is working behind it. Venture capitalists know this, so do your best to establish a team that would bring your startup to the top.
Find a mentor – Business startup owners usually don’t have much experience on what they are doing. With this, it is necessary to have a mentor who could help you in your operations, as well as in getting recommendations that would help you in seeking investors.
Have fun – Venture capitalists like business startup owners who enjoy what they are doing. The success of the business greatly depends on the passion of the people who runs it, so try to enjoy and have fun with your day to day activities. Keep in mind, though, that too much fun may lead to failure, rather than success.
Be ready to fail – Failing to secure a business investment is a common occurrence in the world of entrepreneurship. In case you get turned down, don’t worry, there are other opportunities out there.
Know what you are doing – Finally, know that venture capitalists prefer business owners who know everything about their craft. Therefore, before seeking financial support from venture capitalists, try to know everything about what you are doing in order to convince them that their money will be in safe hands.

12/03/201206/28/2017

Educate Your Investors: Effective Ways to Secure Business Funding

Securing the nod of potential investors such as angel investors or venture capitalists is not an easy job. Most of the time, they have the money but they are not familiar with the industry that your working for. Prior to pitching your startup, it is important that you have some idea on how you will respond to the queries of your potential investors.

Be ready to answer questions such as: What is the scope of your industry? Why should I invest in your company? How much will I get when I fund your business? What is your edge over other companies?

Being prepared to answer such questions will greatly improve your chances of securing business funding. The key is simply to make the investors understand your industry and where you are coming from. If you do that, there is no doubt that you will be able to get the venture capital that you really need.

Aside from being able to respond to the questions thrown at you, you should also try to observe the following tips on how to effectively educate your potential investors about your industry:

1. Explain your industry in a familiar manner – It is important that your potential investor understands your industry. And you can only do that by explaining it to him or her using a familiar context. For instance, if your industry is something that concerns e-commerce, then you might want to explain it by using a relatively known concept such as trade or marketing.

2. Avoid jargons – When talking about a concept that we are knowledgeable of, Continue reading “Educate Your Investors: Effective Ways to Secure Business Funding”

08/29/201206/28/2017

Need Funds? 6 Steps In Applying For A Venture Capital

If you are planning to establish your own startup, one of the first things that you have to do is to secure financial support. One way to do it is to apply for a bank loan. Another – and the more popular one – is to seek support from venture capitalists.

Because of the competition, getting an approval from a VCs is not that easy. However, with the amount of available funds out there, it’s never impossible to get one – if you know what to do.

Everyone agrees that in the process of getting financial support from VCs, the most important moment is the time when you make your pitch to your potential investors. And while you have to pay a lot of attention to this particular occasion, you must also keep in mind that most of your time will not be spent on the actual pitching – it will be on the preparation.

Like baseball pitchers, entrepreneurs who want to secure investments should spend more time preparing for the pitch than the actual pitch itself. Following is a step-by-step preparation process that aims to assist entrepreneurs who seek funding from venture capitalists:

Step 1: Look for Specific Partners

Instead of just looking for investment firms, entrepreneurs should focus their time identifying specific venture partners. Despite working at the same investment firm, partners usually differ in terms of operations, capabilities, and expertise. Some investors, for instance, prefer startups focusing on electronics or health-related services, among others. Knowing this will save you a lot of time.

One way to help you in your research is to speak with other entrepreneurs who recently closed investment rounds. They can give you information regarding not just the firms but also the specific venture partners.

Step 2: Get to Know Your Potential Investors

After identifying a number of potential investors, learn how they operate. It is not advisable to immediately approach them and ask for funds – it’s a one way ticket to rejection. What you must first do is to get to know them and, if possible, get them to know you.

You can connect with them through social media accounts. Follow them on Twitter and check their Facebook presence. You can get their attention by providing insightful and interesting comments on some of their posts. Keep in mind, however, that you have to do this moderately. Otherwise, you’ll be tagged a stalker with a vested interest.

Step 3: Secure Meaningful Referrals

Establishing a social media network with your potential investor is not enough to get their approval. More than that, you should get their attention by securing referrals from people they trust.

Recommendations from accountants and lawyer, while not entirely worthless, would not usually secure an investment. What you must have is a referral from an entrepreneur who is already on the portfolio of your potential venture capitalist. Getting one is difficult, but it might spell the difference between an approval and a rejection.

Step 4: Preview Your Venture First

Like what was previously stated, immediately asking for money is not a very effective move. Thus, when you get the opportunity, schedule a meeting with your potential investors and tell them that you want to preview your venture and get their insights. This will pique their interest and will assure positive reception to future meetings.

Step 5: Provide Updates and Follow-ups

Following the preview meeting, do not forget to send your potential investors with updates and follow-ups. Giving them information about the improving status of your startup will act as a signal that will entice them to forge a partnership with you.

Step 6: Initiate Fundraising

Finally, when you have finished the first five steps, coordinate with your potential venture capitalists and ask them for possible investments. This step should not be very difficult especially with all the information and recommendations that you have previously gathered.

Following the six steps would take a lot of time. But it will assure you that when you return to running your business, you have secured that elusive investment that you really need.

More detailed information and useful advice can be found at www.funded.com Created by Mark Favre, it offers expertise and assistance with developing and funding your concept, including a private forum for queries and discussions. If you need access to investors and funding providers, please do check our website.