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It’s common for venture firms to start raising their next fund in the last year of capital deployment, typically years 3-4 of a fund’s life. This poses a sort of chicken-and-egg problem because many of the common fund performance metrics that Limited Partners use to drive allocation decisions only become reliable, and therefore more meaningful, around year six (Source: Cambridge Associates). Farooq Abbasi, founder and General Partner of Preface Ventures, created a Seed Stage Enterprise VC Funding Napkin to help GPS think through alternative fund metrics that help communicate performance outside the traditional indicators that LPs use to measure success for more mature funds. The Seed Stage Enterprise VC Funding Napkin helps answer the question "What is good enough to raise a subsequent fund in the current market conditions". Farooq from Preface Ventures joined us on Tuesday, February 27th for a discussion about the fund performance metrics GPs can use to benchmark and communicate fund performance when it's still 'early'. View the recording below. Webinar Topics The issue with ‘typical’ fund performance metrics for ‘early’ funds Overview of Preface Venture’s Seed Stage Enterprise VC Funding Napkin Deep dive into alternative early performance benchmarks How to keep track of alternative fund performance metrics How to leverage alternative fund performance indicators into your fundraising narrative Inside look into how Preface Ventures keeps LPs up to date Q&A Resources From the Webinar Christoph Janz's What does it take to raise capital, in SaaS, in 2023? Preface Ventures' A GP's View on VC Fund Performance When It's Early Diversity VC About Preface Ventures Preface Ventures is a New York City-based firm started in 2020 led by Farooq Abbasi. Preface invests $500-$2M at the pre-seed and seed stage into startups who are building the Frontier Enterprise structure. Preface has 20 active positions in Fund II and 7 active positions in Fund III. (Learn more)

In today's fast-paced business world, startups are constantly on the lookout for tools and technologies that can streamline their operations, enhance their productivity, and set them on a path to success. A significant driver of this efficiency is the adoption of Software as a Service (SaaS) tools. These cloud-based applications have not only made high-end software accessible to businesses of all sizes but have also introduced a level of agility and flexibility previously unseen. With the digital transformation accelerated by the pandemic, the reliance on SaaS tools has surged, reflecting the market's exponential growth. According to Statista, the SaaS market has shown remarkable growth, estimated to be worth approximately 197 billion dollars in 2023 and projected to reach 232 billion dollars by 2024​​. Moreover, the integration of Artificial Intelligence (AI) into SaaS has marked a revolutionary change, making these tools smarter and more intuitive. AI's role in automating complex processes, providing actionable insights, and enhancing user experiences has made its inclusion in SaaS tools a game-changer, paving the way for innovative solutions that cater to the dynamic needs of startups. Related Resources: Top SaaS Products for Startups What is a SaaS tool? At its core, a SaaS tool is a cloud-based software that provides users with access to applications over the internet, eliminating the need for internal infrastructure or hardware. This model offers several advantages, particularly for small businesses and startups, including scalability, cost-effectiveness, and accessibility. Tools like Slack, Zoom, Asana, Trello, and Google Workspace epitomize the value of SaaS by offering solutions that enhance communication, project management, and collaboration without the hefty upfront costs typically associated with traditional software. These tools are not just applications; they are catalysts for efficiency, enabling startups to focus on their core business strategies while managing operational tasks with greater ease and flexibility. Related Resource: The SaaS Business Model: How and Why it Works Team Communications At the core of every strong startup team is strong communication. As more teams move to a remote or hybrid environment, the importance of communication has been heightened. Teams that are intentional about communication while working remotely will set themselves up for success. Learn more about the most popular SaaS team communication tools below: 1. Slack Slack has become synonymous with startups. Remote or not, startups are leveraging Slack to communicate with their team members. With enhanced permissions and a solid suite of integrations, Slack (or a similar messaging tool) has almost become table stakes for modern communication. Learn more about Slack here. 2. Zoom Going hand in hand with the explosion of remote work has been Zoom. Now a verb in everyday life — Zoom has transformed the way startups work. Zoom is an easy-to-use video conferencing tool that is generally the standard. Most attendants will be familiar with Zoom and are comfortable getting on a Zoom call. Learn more about Zoom here. Project Management and Workflows One of the main differentiators of a startup is the ability to move quickly. In order to best build products, launch campaigns, and move quickly, startups need a tool in place to stay organized. Project management and workflow tools can be key to staying on top of ongoing projects and development. Related resource: 7 Essential Business Startup Resources Learn more about the most popular project management and workflow tools below: 3. Asana Asana has been a popular project management and workflow tool amongst startups for years. As they put it, “Teams use Asana to easily connect people, processes, and cross-functional teamwork in one place. Yep—more efficiency, without the meetings.” Learn more about Asana here. 4. Trello Trello is another popular project management tool amongst startups. As the team at Trello puts it, “Collaborate, manage projects, and reach new productivity peaks. From high rises to the home office, the way your team works is unique—accomplish it all with Trello.” Learn more about Trello here. 5. Google Workspace Google Workspace is an all-in-one tool that startups commonly leverage. Workspace is a suite of popular tools that can help teams with everything from email to organization to meetings. As the team at Google puts it, “Google Workspace business solutions seamlessly integrate everything you and your team need to get anything done, all in one place.” Learn more about Google Workspace here. Marketing In the realm of digital marketing, the right SaaS tools can be the difference between a successful campaign and a missed opportunity. Startups, in particular, need to leverage these tools to optimize their marketing strategies, engage with their audience, and analyze the performance of their campaigns. Solutions like SEMrush, HubSpot, Mailchimp, SurveyMonkey, and Hotjar offer a suite of features tailored for digital marketing, from SEO analysis and inbound marketing to email campaigns and user feedback. These tools empower startups to navigate the complexities of digital marketing, providing them with the insights and automation needed to reach their target audience effectively and efficiently. 6. SEMrush SEMrush, a cornerstone in content marketing for startups, now integrates advanced AI features, enhancing its all-in-one toolkit for SEO, social media marketing, and beyond. This platform not only facilitates SEO, content marketing, competitor research, PPC, and social media marketing from a single platform but now also leverages AI to offer smarter insights, content optimization, and more efficient strategy planning. As SEMrush evolves, it continues to provide comprehensive support for digital marketing efforts, making it even easier for teams to execute effective campaigns with precision and creativity. Learn more about SEMrush here. 7. HubSpot HubSpot is one of the largest sales and marketing tools for startups. HubSpot covers everything from a sales CRM to email marketing to landing page creation. As the team at HubSpot puts it, “HubSpot’s CRM platform has all the tools and integrations you need for marketing, sales, content management, and customer service. Each product in the platform is powerful alone, but the real magic happens when you use them together.” HubSpot has recently also significantly upgraded its platform with the use of AI and enhanced Sales Hub features. These updates include AI Assistants to streamline content creation and customer engagement, AI Agents for automating customer service, and AI Insights for predictive analytics. Additionally, new Sales Hub capabilities focus on efficient prospecting, advanced lead management, AI-powered sales forecasting, and deeper LinkedIn integration to improve sales productivity and customer connections​​​​​​. These advancements underscore HubSpot's commitment to leveraging AI to provide comprehensive solutions across marketing, sales, and customer service, helping businesses thrive in the digital age. Learn more about HubSpot here. 8. Mailchimp Mailchimp is a popular tool to help startups distribute marketing emails. The robust email marketing tool scales well with startups as well. As the team at Mailchimp puts it, “Win new customers with the #1 email marketing and automation brand* that recommends ways to get more opens, clicks, and sales.” Mailchimp has also recently launched a series of new features and updated powered by AI such as an Email Content Generator, to streamline the creation of targeted email campaigns. These advancements, aimed at small businesses and startups, encompass improved analytics, advanced segmentation, e-commerce automations, and SMS marketing, facilitating a more integrated approach to digital marketing strategies. Learn more about Mailchimp here. 9. SurveyMonkey SurveyMonkey, now enhanced with AI, streamlines survey creation and form building for marketers. Its new "Build with AI" feature uses GPT-3 technology and SurveyMonkey's rich data history to let users quickly generate surveys from simple descriptions. Alongside, SurveyMonkey Forms offers an intuitive platform for creating various web forms, equipped with customizable templates and integration options. These tools provide fast, efficient ways to gather insights, making SurveyMonkey a strategic asset for data-driven marketing decisions​​​​​​. Learn more about SurveyMonkey here. 10. Hotjar Hotjar is a comprehensive tool for understanding user behavior and feedback on websites. It offers features like flexible dashboards, sentiment analysis, and new integrations to help marketers and product teams gain deep insights. With Hotjar, users can customize dashboards to track key metrics, utilize AI for sentiment analysis of survey responses, and leverage integrations for more impactful campaigns. These capabilities make Hotjar an essential tool for improving website usability, increasing conversion rates, and enhancing overall user experience​​. Learn more about Hotjar here. Social Media Management In today's digital age, social media is a battleground where brands vie for attention, engagement, and loyalty. Social media management tools such as Sprout Social, Hootsuite, Buffer, and Canva are indispensable for startups aiming to establish a strong online presence. These platforms offer a centralized dashboard for managing multiple social media accounts, scheduling posts, analyzing engagement data, and creating visually appealing content. By simplifying the social media management process, these tools allow startups to maintain a consistent brand voice across platforms, engage with their audience in real time, and measure the impact of their social media strategies. 11. Sprout Social Sprout Social is a dedicated tool to help companies level up their social media marketing. As the team at Sprout Social puts it, “Our all-in-one social media management platform unlocks the full potential of social to transform not just your marketing strategy—but every area of your organization.” Learn more about Sprout Social here. 12. Hootsuite Hootsuite is a versatile social media management platform that offers a range of features to help users effectively manage their online presence across different platforms. Its key features include publishing and scheduling posts, social media analytics, AI content creation, optimal posting times, social listening, engagement tools, and more. These tools are designed to improve social media strategies through efficient scheduling, insightful analytics, and enhanced audience engagement. Hootsuite's integrations with popular social networks and tools like Canva enhance its utility. Learn more about Hootsuite here. 13. Buffer Buffer evolved significantly in 2023, introducing 26 new features, including an AI Assistant integrated with ChatGPT, helping users generate new posts, repurpose existing ones, and create endless new ideas. It supports various social channels like Facebook, Instagram, LinkedIn, and more, offering tools for publishing, analytics, and engagement. These developments make Buffer a powerful tool for social media management, allowing for organized content, streamlined collaboration, and efficient scheduling across multiple platforms​​. Learn more about Buffer here. 14. Canva Canva offers design tools that anyone can use — regardless of their design skills. Canva can help marketing teams create assets for their marketing site, email campaigns, social media, and more. As the team at Canva puts it, “Canva makes it easy to create professional designs and to share or print them.” Learn more about Canva here. Web Development Tools For startups, establishing a strong online presence is non-negotiable, and web development tools play a crucial role in achieving this. Tools like Zapier, GitHub, and Firebase offer powerful functionalities for building, deploying, and managing web applications. These platforms facilitate collaboration among development teams, streamline workflows, and offer scalable solutions for managing databases, backend services, and integrations. By leveraging these web development tools, startups can expedite their development processes, ensure high-quality outputs, and maintain flexibility to adapt to market demands, ultimately leading to a robust and reliable online presence. 15. Zapier Zapier is a powerful automation tool that connects different web applications to automate repetitive tasks without the need for coding. It's highly valued in web development for its ability to streamline workflows and enhance productivity by linking over 3,000 apps, such as databases, development tools, and project management services. This facilitates seamless integration and data exchange between services, making it easier for developers to focus on more complex tasks and project innovation. Learn more about Zapier here. 16. Github GitHub is a leading web development platform that enables collaboration on code, project management, and software development. It's renowned for hosting open-source projects, facilitating version control with Git, and offering features like pull requests, issues tracking, and GitHub Actions for automation. This makes GitHub indispensable for developers looking to work together on projects, share code, and integrate with various development tools, thereby streamlining the software development process and fostering innovation within the global developer community. Learn more about GitHub here. 17. Firebase Firebase is a comprehensive platform developed by Google to help build, improve, and grow web and mobile applications. It offers a wide range of tools and services, including hosting, real-time databases, authentication, analytics, and machine learning capabilities. Its ability to provide a backend-as-a-service saves developers time and effort in setting up servers and writing backend code, making it an excellent tool for rapidly developing high-quality applications with scalable infrastructure. Firebase integrates seamlessly with other Google services and supports both web and mobile platforms, enhancing the development workflow and user engagement. Learn more about Firebase here. Accounting and Financial Tools Startup leaders need to have a pulse on where their business is at financially. To achieve this, most startups need to adopt a bookkeeping or accounting solution. You might also consider hiring a professional firm for assistance in this area. The tools below are designed to integrate seamlessly with your existing systems, providing a comprehensive overview of your financial statements and ensuring that you have the insights needed to make informed decisionsl. Learn more about popular accounting and financial tools below: 18. Quickbooks Quickbooks is the defacto name in accounting and financial software. Quickbooks offers an array of products and tools to help with all aspects of accounting and finance. As put by the team at Quickbooks, “Easily track income, expenses, and more with accounting software designed for all kinds of businesses.” Learn more about Quickbooks here. 19. Xero Xero is a cloud-based accounting software tailored for small to medium-sized businesses, offering features such as invoicing, payroll, and bank reconciliation. It simplifies financial management with real-time reporting and compatibility with over 800 third-party apps. Xero's user-friendly platform allows for seamless collaboration between business owners and accountants, ensuring efficient financial oversight. Learn more about Xero here. Investor Relationship Management Leveraging the resources around you is a surefire way to help grow your business. For many founders, their investors can be a great source to help with fundraising, hiring, and developing your business strategy. Many times, investors have networks and resources that founders can tap into. To best do this, founders need to have a way to regularly communicate with their investors to build their relationships and trust. Learn more below: 20. Visible If you’re a startup that has taken on outside funding it is important to have a game plan in place to report and communicate with your investors. This will not only improve your odds of raising follow-on funding but will allow you to lean on investors for help with hiring, strategy, and more. Raise capital, update investors, and engage your team from a single platform. Try Visible free for 14 days. Related Resource: How Startups Can Use an Investor Matching Tool to Secure Funding Search Engine Optimization Marketing teams running robust content programs may require dedicated tools to effectively manage their strategies. For instance, teams focusing on organic search as a key channel would benefit from tools designed to enhance and streamline their content efforts. Learn more about the most popular search engine optimization tools below: 21. Ahrefs Ahrefs is an all-in-one analytics tool to help marketers track their organic search efforts. As the team at Ahrefs puts it, “Ahrefs is everything you need to rank higher & get more traffic.” Learn more about Ahrefs here. 22. Moz Moz is another tool that helps marketers with all aspects of their content marketing efforts. As the team at Moz puts it, “SEO software and data to help you increase traffic, rankings, and visibility in search results.” Learn more about Moz here. Data & Analytics As the adage goes, “You can’t improve what you don’t measure.” Having a way to track and monitor key metrics and data is a must for startups. This might look different for companies at different stages. For example, a more mature product or startup might require more advanced analytics and tracking than a startup with no customers yet. Related Resource: Our Ultimate Guide to SaaS Metrics Learn more about the most popular data analytics tools below: 23. Google Analytics Google Analytics is a must-have for any startup that leverages its website to attract new customers. With Google Analytics you’ll be able to slice and dice different website data to see how visitors are interacting with your content. Learn more about Google Analytics here. 24. Segment Segment is a leader in customer data. With their suite of tools and APIs, startups can leverage Segment to collect and analyze data about their customers. As the team at Segment puts it, “Segment collects events from your web & mobile apps and provides a complete data toolkit to every team in your company.” Learn more about Segment here. Human Resources and Payroll On top of recruiting and hiring top talent, startup leaders need a way to manage their human resources and payroll. Luckily, countless SaaS tools can help leaders with everything from benefits to payroll. Learn more about the most popular human resource and payroll tools below: 25. BambooHR BambooHR is an all-in-one tool that helps startups with all aspects of human resources. BambooHR comes with tools to help with everything from hiring to onboarding to compensation. As the team at BambooHR puts it, “Create a great place to work at every stage of growth with all-in-one software from BambooHR.” Learn more about BambooHR here. 26. Gusto Gusto is a leader in payroll solutions. Gusto’s bread and butter is payroll and benefits for startups. As the team at Gusto puts it, “A well-supported team is the key to a successful business. With Gusto’s easy-to-use platform, you can empower your people and push your business forward.” Learn more about Gusto here. 27. ADP ADP has been in the payroll and HR business for a while. As the team at ADP puts it, “Fast, easy, accurate payroll and tax, so you can save time and money.” Learn more about ADP here. Get the Funding Your Startup Needs with Visible Startups are in competition for two resources — capital and talent. Having a system in place to attract and close capital for your business can help speed up a fundraise so you can focus on what matters most, building your business. Related Resource: The Understandable Guide to Startup Funding Stages Find investors for your startup, share your pitch deck, nurture them with updates, and track your conversations all from one platform — give Visible a free try for 14 days here.

In today's fast-paced startup ecosystem, staying informed and inspired is paramount for founders. Newsletters offer a direct line to the most current insights, trends, and advice, tailored to the unique challenges and opportunities entrepreneurs face. We will navigate the criteria that distinguish the most impactful subscriptions from the rest by highlighting how to select newsletters that resonate with founders' specific needs and interests. Moreover, we'll explore a curated list of the best newsletters for startup founders, ensuring readers have access to a well-rounded collection of resources that cater to various facets of the startup journey, from venture capital and tech innovations to practical advice on scaling and managing a startup. Whether you're at the helm of a growing tech startup or navigating the early stages of your entrepreneurial venture, this guide will help you harness the power of newsletters to fuel your journey forward. Why Should Startup Founders Read Newsletters? Startup founders stand to gain immensely from subscribing to (the right) newsletters focused on entrepreneurship, venture capital, tech news, fundraising, and other startup-related topics. These newsletters serve as a channel for curated, high-quality content that is tailored to the dynamic needs of startups. One of the primary benefits is the aggregation of relevant information, insights, and trends delivered directly to founders' inboxes. This direct delivery means founders can stay abreast of the latest developments in their industry without spending precious time searching for information across various platforms. The curated content in these newsletters is meticulously selected to provide value, whether by offering advice on navigating the challenges of startup life, insights into raising capital, or updates on technological advancements. By subscribing to high-quality newsletters, startup founders can leverage the collective knowledge and experiences of the broader entrepreneurial ecosystem, enhancing their own ventures' potential for success. Newsletters are the easiest way to get the most current information that can help founders especially make informed decisions, learn from the successes and failures of their peers, and discover new opportunities for growth and innovation. What to Look for in Startup Founder Newsletters When searching for valuable newsletters to subscribe to, startup founders should prioritize content that aligns with their specific needs and goals. Essential features to look for include industry relevance, practical advice, diverse perspectives, and frequency that suit your schedule. Newsletters tailored to specific types of founders, such as those related to the specific industry, investment stage, or area of needed improvement, can offer more targeted insights and strategies. Industry Relevance and Focus: Select newsletters that cater to your industry, whether it's tech, health, SaaS, or e-commerce, to ensure the content is directly applicable to your startup. For example, CB Insights offers trend analysis and research for sectors like retail, fintech, and healthcare, making it a valuable resource for staying on top of industry-specific innovations and market dynamics​​. Stage-Specific Content: Depending on the stage of your startup, look for newsletters that offer stage-specific insights. Early-stage founders might find value in newsletters like First 1000, which provides case studies on how successful companies acquired their early customers, offering inspiration and practical strategies for customer acquisition​​. Quality of Curation and Practical Advice: Newsletters that feature high-quality curation and actionable advice can be particularly beneficial. For instance, Growth.Design presents product tips in a comic book format, making complex concepts more accessible and engaging​​. This innovative approach to presenting information can help founders grasp and apply new strategies more effectively. Diverse Perspectives: It's beneficial to choose newsletters that include a range of voices and perspectives. This diversity can offer a more nuanced understanding of the challenges and opportunities within the startup ecosystem. Newsletters like Black Tech Pipeline highlight DEI practices and offer exposure to diverse talents and perspectives, enriching your understanding and approach to building a more inclusive startup culture​​. Frequency and Format: Consider how often you want to receive updates and in what format. Whether you prefer a daily digest, a weekly deep dive, or a monthly roundup, the frequency and format should fit your preferences and availability. For example, SaaS Weekly by Hiten Shah delivers a weekly roundup of actionable guidance from experts in various aspects of SaaS, catering to founders looking for concise, weekly insights​​. Exclusivity and Community: Some newsletters offer access to exclusive events, networks, or communities. These can be invaluable for networking, finding mentors, or connecting with potential investors. By focusing on these features and tailoring your newsletter subscriptions to your startup's needs, you can ensure that the content you receive is not only relevant and useful but also a pleasure to read. Subscribing to a well-chosen mix of newsletters can provide a steady stream of inspiration, knowledge, and actionable advice to support your journey as a startup founder. 15 Newsletters Startup Founders Don’t Want to Miss In the ever-evolving landscape of startups, staying updated with the latest trends, insights, and strategies is not just beneficial—it's essential for growth and sustainability. As a startup founder, your inbox can be a treasure trove of valuable resources, provided you subscribe to the right newsletters. To ensure you're well-equipped on your entrepreneurial journey, we've compiled a list of 15 must-subscribe newsletters. Related Resources: 6 More Great Startup Newsletters The 16 Best Startup Newsletters HBR – Management Tip of the Day The "HBR – Management Tip of the Day" newsletter is highly regarded for providing startup founders with a wealth of practical advice and management strategies, directly benefiting their leadership and operational efficiency. Topics range from building your own company to bettering yourself as a leader and founder. The emphasis on practical, quick-read content ensures that busy startup founders can easily integrate these insights into their daily routines. It lands in your inbox every weekday morning and posts are generally short and can be read in just a couple of minutes. You can subscribe to HBR Newsletters here. (Note: HBR offers a number of another valuable newsletter that come highly recommended as well). Tomasz Tunguz Tomasz Tunguz's newsletter offers startup founders a deep dive into the complexities of building and scaling a startup from a venture capitalist's perspective. Tunguz, a Partner at Redpoint Ventures and former Google Product Manager, brings a wealth of experience and insight, covering a broad spectrum of topics critical to startup success, including customer success, term sheets, and cap tables. He covers a wide range of critical startup topics, from securing venture capital to strategic business planning. His advice on leveraging sustainable competitive differentiators and focusing on metrics for success are particularly beneficial for founders aiming to scale their startups effectively. Founders have noted that they enjoy the newsletter's in-depth analysis, actionable insights, and Tunguz's unique perspective on growth and content marketing strategies. Tunguz's emphasis on practical advice, grounded in his venture capital expertise, makes his newsletter an essential tool for startup founders seeking to navigate the challenges of building and growing their businesses​ You can subscribe to Tomasz Tunguz’ Newsletter here. Hacker Newsletter A weekly newsletter curating the top posts on Hacker News over the course of the week, ensuring its readers never miss out on key developments in these fields. The content covers everything from code and design to popular books and tips for working. This curated approach not only helps professionals stay abreast of the latest tech trends and discussions but also aids in filtering the vast amount of information available online, presenting it in a digestible and actionable format. Established in 2010 by Kale Davis, who is known for his senior engineering role at MailChimp, the newsletter boasts a handpicked selection of stories, organized into sections, along with recommendations for design, code, and content. This approach has garnered a loyal following of 60,000 subscribers who eagerly anticipate its weekend delivery​​. You can subscribe to Hacker Newsletter here. StrictlyVC For those seeking to keep a pulse on startup fundings, acquisitions, and major stories shaping the venture capital landscape, StrictlyVC offers an essential daily rundown by Connie Gallippi, Founder of BitGive. While not strategic content to help with your business directly Connie highlights all of the VC deals closed during the previous day and any relevant news in the tech/startup world. One of the team favorites at Visible. You can subscribe to StrictlyVC here. First Round Review An incredibly popular, and useful, newsletter from the team at First Round. In a weekly newsletter packed with content the First Round Review Newsletter highlights everything from the previous week on their blog. Generally, covering a bit of all things “startup” First Round has strong content around culture, diversity, and hiring. Offering entrepreneurs actionable insights and curated advice from the startup ecosystem, it's designed to be the "Harvard Business Review for Startups," featuring articles on a wide array of subjects from leadership to startup strategies. You can subscribe to the First Round Review Newsletter Here. Check Out the Visible Weekly Newsletter Today While the 15 newsletters listed are some of our favorites, Visible's weekly newsletter is one not to be missed and is an essential subscription for founders seeking comprehensive updates on fundraising, investor relations, growth metrics, and all things startups. For direct access to insights that can shape your startup's future, subscribe to Visible’s Newsletter here. Related resource: How To Write the Perfect Investor Update (Tips and Templates)

Option pools are a vital component in the landscape of startups, particularly in the realm of employee compensation. They represent a portion of a company's shares set aside primarily for future allocation to employees, advisors, or consultants, typically in the form of stock options or other equity incentives. For startups, often constrained in terms of financial resources, option pools serve as a strategic tool to attract, retain, and motivate key talent by offering them a stake in the company's future. This guide delves into the definition, purposes, and benefits of option pools, providing startup founders with a comprehensive understanding of how to effectively utilize them. What Is An Option Pool? An option pool includes employee stock options (ESOs), restricted stock units (RSUs), and sometimes stock appreciation rights (SARs). It's generally established during financing rounds, where its size, expressed as a percentage of the fully diluted capitalization of the company, is negotiated between investors and founders. Option pools differ from other forms of equity compensation in their structure and function, specifically designed to align the interests of employees with those of the company and its investors. Related resource: How to Secure Financing With a Bulletproof Startup Fundraising Strategy What Is The Purpose Of An Option Pool? The purposes of an option pool in a startup are multifaceted and crucial for its growth and competitive positioning in the market. Attract and Retain Talent: Startups, especially in their early stages, often struggle to match the salary and benefits packages offered by established corporations. An option pool allows these nascent companies to offer equity, which serves as a compelling incentive for talented individuals who are motivated by the potential for significant financial upside. This equity component in compensation packages not only attracts top-notch talent but also fosters a sense of dedication and commitment among team members, as they gain a stake in the company's success. The idea is that by sharing in the company's potential growth, employees will be more invested and motivated to contribute to its long-term success. Align Incentives: Beyond attracting talent, option pools serve as an effective tool to align the interests of employees with those of the company's founders and investors. By granting equity, all parties involved become stakeholders in the company's future, thereby creating a harmonious relationship that fosters collaboration and a shared vision for the company. The vesting process, which allows employees to earn their equity over time, further ensures their long-term commitment and motivation, as their benefits are tied to achieving certain milestones or continued employment. Compete for Talent: In the highly competitive startup environment, an option pool can be a critical factor for attracting top talent. This is particularly important when startups have limited cash compensation capabilities. By offering equity, startups can level the playing field against larger, more established firms that might offer higher salaries but less in terms of equity and potential for growth. It's also important to note that the creation and management of an option pool require careful planning and strategic thinking. The size of the pool, usually ranging from 10% to 20% of the company's total equity, must be thoughtfully determined to balance the needs of incentivizing employees and preserving equity for future needs and rounds of financing. Furthermore, the allocation of these options is usually based on various factors such as job role, experience, and performance, and it's crucial to strike a balance between offering sufficient equity to motivate employees while retaining enough ownership for existing investors. As well, the impact of an option pool on company valuation and stock dilution is a significant consideration. When new shares are issued from an option pool, it can lead to the dilution of existing shareholders' ownership. However, this is often seen as a necessary trade-off for attracting and retaining the talent needed for a startup's growth and success. How Option Pools Work Understanding how option pools work is essential for startup founders who seek to use this tool for attracting, retaining, and aligning the interests of their team. Here's a step-by-step breakdown of how option pools function: 1. Creation The process begins with the creation of the option pool, which is approved by the company's board of directors. This crucial step involves specifying the number of shares that will be included in the pool. The size of the option pool is typically a percentage of the company's total equity, often ranging from 10% to 20%, depending on various factors like the company's growth stage, industry norms, and investor expectations. The board's approval is crucial as it formalizes the existence of the option pool and sets the stage for its strategic utilization. 2. Allocation Once created, the shares in the option pool are reserved and set aside, making them unavailable for immediate purchase. These shares are typically carved out from the founders' equity, which is a strategic move to ensure that the interests of the founders and the employees are aligned. The allocation of these shares is done with a view toward future growth, keeping in mind the need to attract and retain key talent. 3. Granting Options The next step involves the actual granting of options to employees, advisors, or consultants. This grant gives the recipients the right, but not the obligation, to purchase a specified number of shares at a predetermined price, usually the current fair market value, within a defined time frame. This timeframe is known as the vesting period, during which the recipients of the options can exercise their right to buy the shares. 4. Vesting Vesting is a critical component of the option pool process. It refers to the period during which the options granted to employees become exercisable. This period is typically structured to occur over several years, with a common structure being a four-year vesting period with a one-year cliff. The cliff means that the employee must remain with the company for at least a year to earn any of the options. After the cliff, options typically vest monthly or annually, incentivizing employees to stay with the company and contribute to its growth over a longer term. 5. Exercising Options Once the options have vested, employees have the choice to exercise them, meaning they can buy the shares at the previously agreed-upon price. This step transforms the employees into shareholders of the company, aligning their interests even more closely with the company’s success. The decision to exercise options can be influenced by various factors, including the company's performance, the employee's belief in its future success, and personal financial considerations. Benefits of Options Pools For Startups Option pools are a strategic asset for startups, offering several key benefits that align with the company's growth and employee satisfaction. Talent Acquisition and Retention In the competitive startup landscape, equity incentives provided through option pools are invaluable. They enable startups to attract high-quality talent, offering a compelling alternative to the higher salaries typically available at larger, more established companies. By offering a stake in the company's future success, startups can lure talented professionals who are enticed by the prospect of significant financial rewards, especially in the event of successful company exits like acquisitions or IPOs. This approach helps startups not only in attracting but also in retaining talent, as employees become invested in the company's long-term success. Retention Magnet Option pools serve as a powerful tool for retaining key employees. They align employee goals with the company's success, fostering a sense of loyalty and dedication. The vesting schedules, often spanning several years, encourage employees to stay with the company longer, contributing to reduced turnover and enhanced organizational stability. Cost-Effectiveness and Flexibility From a financial standpoint, option pools offer a cost-effective way to incentivize employees. Unlike cash salaries, equity incentives are tied to the company's performance, which means that the financial rewards for employees scale with the company's success. This arrangement is particularly beneficial for startups that need to manage cash flow carefully. Flexible Talent Strategy: Option pools provide the flexibility to tailor equity incentives to specific roles and performance levels within the company. Startups can customize the allocation of options based on the strategic importance of different roles, allowing for a more nuanced approach to compensation that aligns with individual contributions and the company’s broader objectives. Motivation and Alignment By granting stock options, startups foster an ownership mentality among employees. This sense of ownership motivates employees to contribute actively to the company’s growth and profitability. When employees have a direct stake in the outcome, they are more likely to be engaged and aligned with the company's goals. Learn More About Option Pools With Visible Option pools are a critical tool for startups, offering benefits that extend far beyond simple compensation. They are essential for attracting and retaining top talent in a competitive market, aligning employee interests with those of the company, and providing a cost-effective compensation strategy. By creating a sense of ownership among employees, startups can foster a motivated workforce dedicated to the company's success. Managing an option pool requires strategic planning and an understanding of its impact on company valuation and equity dilution. For founders looking to navigate the complexities of other startup challenges, Visible is an invaluable resource. Raise capital, update investors, and engage your team from a single platform. Try Visible free for 14 days. Related resource: The Ultimate Guide to Startup Funding Stages Related resource: Startup Fundraising Checklist

In an era where technology is rapidly reshaping every aspect of our lives, the education sector is no exception. This article delves into the world of EdTech startups, a dynamic realm where innovation meets education, fundamentally transforming how we learn and teach. These pioneering companies are not just altering the educational landscape; they're rewriting the rulebook, leveraging cutting-edge technologies to create personalized, accessible, and effective learning experiences. From AI-powered platforms to innovative online learning solutions, read further to explore the top 18 revolutionary EdTech startups that are redefining the boundaries of education and opening new horizons for learners and educators alike. Related resource: The VCs Fueling the Future of Education: A Guide for EdTech Founders Related resource: 11 Steps for Building a Successful Tech Company 1. SanaLabs Year Founded: 2016 Location: Stockholm, Sweden Funding Amount/Type: Total of $82 million in funding Funding Series: Latest round -$62 million Series B Major Investors: New Enterprise Associates, Workday Ventures, Menlo Ventures, EQT Ventures​​​​ SanaLabs utilizes AI to transform the personalized learning experience in the workplace. Their platform integrates advanced AI technologies for personalized learning recommendations and an AI writing assistant that generates content. This approach facilitates a more efficient and tailored learning experience for individuals, enhancing their engagement and productivity. The AI-powered semantic search feature enables employees to easily access vital organizational knowledge, streamlining the learning process. The impact of SanaLabs' technology is significant in terms of reducing onboarding time, boosting sales efficiency, and enhancing talent retention. What sets SanaLabs apart in the EdTech field is the innovative use of AI to merge learning with knowledge management, providing a comprehensive learning platform that reshapes traditional organizational learning methods​​​​. 2. Jolt Year Founded: 2015 Location: Tel Aviv, Israel Funding Amount/Type: Total funding of $23 million Funding Series: Last recorded as Series A- $14.1 million Major Investors: Climentum Capital, among others​​​​​​ Jolt stands out in the EdTech field with its "Not an MBA" program, designed as an alternative to traditional higher education, especially MBA courses. The program focuses on practical skills essential for the modern workforce, allowing adults to continue working while pursuing their education. This approach ensures that learning is not just theoretical but immediately applicable in real-world business scenarios. What makes Jolt particularly exciting is its commitment to adaptability and accessibility. The courses are structured to be flexible, allowing students to tailor their learning experience to their individual needs and schedules. This model of education, which emphasizes practicality and real-world application, positions Jolt as a forward-thinking player in the realm of EdTech, addressing the evolving needs of today's professionals and industries​​​​. 3. Elevate K-12 Year Founded: 2015 Location: Chicago, IL, USA Funding Amount/Type: Total funding of $54.5 million Funding Series: The most recent round was Series C Major Investors: Information on specific major investors is not readily available Elevate K-12 offers a distinctive approach to education in the EdTech field. Their focus is on developing proprietary live-stream learning systems. While the specifics of their AI implementation in personalized learning are not detailed in the available sources, their unique model revolves around providing live-streamed instruction directly into classrooms. This method addresses the teacher shortage and ensures quality education is accessible regardless of location. The impact of Elevate K-12's technology is significant in democratizing education, offering real-time, interactive learning experiences that cater to diverse educational needs. This approach is particularly notable in the EdTech sector for its potential to transform traditional classroom dynamics and provide equitable access to quality education​​. 4. GoGuardian Year Founded: 2014 Location: Los Angeles, California, USA Funding Amount/Type: $200 million in total funding Funding Series: Latest funding was a Series B round Major Investors: Includes Tiger Global Management GoGuardian offers a unique approach in the EdTech space, focusing on ensuring safe and productive digital learning environments. Their technology offers solutions for managing and monitoring online learning, which is particularly relevant in today's increasingly digital classroom settings. By providing educators with tools to oversee and guide student interactions online, GoGuardian plays a crucial role in both protecting students and enhancing the educational process. This focus on digital safety and efficient learning management makes GoGuardian an exciting and essential player in the field of EdTech, especially considering the growing importance of online education and digital literacy​​. 5. OpenClassrooms Year Founded: September 2013​​. Location: Headquarters in Paris, France​​. Funding Amount/Type: Total funding raised is approximately $149.7 million​​. Funding Series: Includes Series B and C funding rounds; Series B in May 2018 raised about $60 million​​, and Series C in April 2021 raised $80 million​​. Major Investors: General Atlantic, Lumos Capital Group, GSV Ventures, the Chan Zuckerberg Initiative, Salesforce Ventures, Bpifrance, among others​​​​. OpenClassrooms employs a unique approach to personalized learning, integrating AI and other technologies to tailor education to individual student needs. This online platform offers a variety of competency-based training programs in high-demand fields, supported by individual mentorship and project-based learning. The use of AI enhances the personalization of the learning process, ensuring that each student's experience is aligned with their specific educational needs and career goals. This approach significantly impacts individual learning outcomes, improving both the quality of education and employment prospects for graduates. OpenClassrooms is particularly exciting in the edtech field due to its innovative use of technology in education, its commitment to employability, and its job guarantee program, reflecting a strong alignment with current and future job market demands. This makes it a standout example of how technology can transform education to meet the evolving needs of learners and employers alike. 6. 360Learning Year Founded: 2013. Location: Headquartered in New York, New York, USA. Funding Amount/Type: The company has raised a significant $200 million in funding. Funding Series: The most recent funding round, amounting to $200 million, was led by Sumeru Equity Partners, SoftBank Vision Fund 2, and Silver Lake Waterman​​​​. Major Investors: Notable investors include Sumeru Equity Partners, SoftBank Vision Fund 2, Silver Lake Waterman, along with Bpifrance’s Large Venture fund, XAnge, and Educapital​​​​. 360Learning distinguishes itself in the edtech field with its focus on collaborative learning, using a platform that facilitates the creation and sharing of courses within organizations. This approach leverages internal expertise, enabling employees to effectively learn from their peers. The platform is designed to integrate various types of media into course creation, making the learning experience more interactive and engaging. AI plays a key role in this ecosystem by identifying areas where courses can be improved and optimizing the matching of courses to the specific needs of employees. The impact of 360Learning's technology on the learning experience is significant. It fosters a more dynamic and relevant learning environment by emphasizing collaborative and peer-to-peer learning. This not only enhances knowledge sharing within organizations but also helps in retaining institutional knowledge, which is crucial during periods of generational changes in the workforce. In the context of an evolving work environment and the growing importance of remote and distributed teams, 360Learning's innovative approach to corporate learning positions it as a forward-thinking and influential player in the edtech sector​​​​. 7. AllCampus Year Founded: AllCampus was founded in 2012. Location: The company is based in Chicago. Funding Information: Specific funding details are not publicly available. AllCampus takes a distinctive approach in the field of educational technology. While specific details about their use of AI in personalized learning were not readily available in the sources, the company is known for partnering with traditional higher education institutions to enhance online enrollment and maximize market share through comprehensive online program management services. This includes a focus on various aspects of online education, such as course design, marketing, recruitment, and student retention. Their approach likely includes leveraging technology to tailor these services to the needs of individual institutions and their students, thereby enhancing the learning experience and outcomes. The unique position of AllCampus in the edtech sector lies in its partnership-based model, focusing on supporting traditional higher education institutions in expanding and optimizing their online offerings. This approach is especially pertinent in the current educational landscape, where the demand for flexible, online learning solutions is growing. AllCampus's contributions to this field are vital in aiding educational institutions to navigate and adapt to the evolving demands of higher education in the digital age​​. 8. Codecademy Year Founded: Codecademy was founded in August 2011. Location: The company is headquartered in New York City, New York, USA. Funding Amount/Type: Codecademy has raised significant funding, including a $40 million Series D round. Funding Series: The Series D funding round was led by Owl Ventures, with participation from Prosus and Union Square Ventures. Major Investors: Notable investors include Union Square Ventures and Naspers, along with Owl Ventures, Prosus, and others​​​​. Codecademy employs an interactive platform for learning coding, offering an engaging and hands-on experience across a variety of programming languages and frameworks. This approach, focusing on active engagement rather than passive video learning, enhances skill retention and understanding, vital in coding where practical application is key. In the edtech sector, Codecademy is distinguished by its specialized focus on in-demand coding and programming skills. Its range of courses and interactive learning model make it a valuable tool for those seeking to develop technical skills. The platform's growth, including its move into enterprise solutions, underscores its significance in the evolving educational technology landscape. 9. Teachable Year Founded: 2014 Location: New York, NY, United States Funding Amount/Type: $13.5 million Funding Series: Not specifically mentioned. Teachable offers a unique approach to personalized learning using AI in its online course creation platform. This platform allows users to create and sell online courses, providing tools for course personalization, quizzes, certificates, student feedback, and more. Its AI-enhanced features likely contribute to improved individual learning experiences and outcomes by offering tailored content and interactive learning tools. This capability is significant in the field of edtech, as it empowers educators and experts to share their knowledge more effectively and efficiently, enhancing the overall quality of online education. 10. Everspring Year Founded: 2011 Location: Chicago, IL, United States Funding Amount/Type: $60.5 million Funding Information: No other information was given. Everspring offers a unique approach to personalized learning through its technology and services platform, which provides customized, integrated education solutions online. Their platform supports various aspects of online education, including strategic planning, enrollment, and course development. This integrated approach has a significant impact on individual learning experiences and outcomes by offering tailored educational solutions. Everspring's role in the edtech field is noteworthy due to its comprehensive support for online education, enhancing accessibility and quality. 11. GoStudent Year Founded: 2016 Location: Headquarters in Wien, Austria Funding Amount/Type: $344.9 million in total funding Funding Information: No other information was given. GoStudent's unique approach to personalized learning incorporates one-to-one, video-based tuition for students across a variety of subjects. This method, coupled with their use of AI for tutor selection and onboarding, enhances individual learning experiences and outcomes by providing tailored educational support. The startup is significant in the edtech field due to its focus on personalized, accessible online education, which aligns with evolving educational needs and technological advancements. 12. BrainPOP Year Founded: 1999 Location: Headquarters in New York, NY, United States Funding Amount/Type: Not publicly disclosed BrainPOP's approach to personalized learning is centered around its online educational solutions, particularly its short animated movies designed to develop critical, computational, and creative thinking skills. This method significantly impacts individual learning experiences, especially for younger students, by making complex subjects engaging and understandable. BrainPOP's presence in the field of edtech is exciting because it combines entertainment with education, making learning more interactive and enjoyable. 13. Snap! Mobile Year Founded: Founded in 2014. Location: The company is based in Seattle, Washington. Funding Amount/Type: Snap! Mobile raised $90 million in funding. Major Investors: The funding round was led by Elysian Park Ventures. Snap! Mobile in edtech offers AI-enhanced tools for school program management, focusing on fundraising and finance. This streamlines administration, aiding personalized student learning. Their support for extracurriculars impacts individual development, addressing key financial and administrative needs in education. 14. Edapp Year Founded: Information on the exact founding year of Edapp is not readily available. Location: Edapp is headquartered in New York, NY, United States. Funding Information: There has been no information disclosed regarding their funding. Edapp stands out in the edtech field with its mobile learning management system that includes features like microlearning and gamification. It's not explicitly detailed how AI is utilized for personalized learning, but the emphasis on mobile learning and engaging content delivery likely contributes to a more tailored learning experience. The impact of their technology on individual learning is significant, especially in how it caters to the modern, on-the-go lifestyle. Edapp's mobile-centric approach makes it an exciting and relevant player in the edtech space, adapting to the evolving needs of learners and educators alike. 15. BetterUp Year Founded: 2013 Location: Headquartered in Austin, Texas, United States Funding Amount/Type: BetterUp has raised a total of $269.8 million in funding. Funding Series: Their latest funding was a $300 million Series E round. Major Investors: Key investors include Wellington Management, ICONIQ Growth, Lightspeed Venture Partners, Threshold Ventures, Plus Capital, Salesforce Ventures, Sapphire Ventures, Mubadala Capital, Freestyle Capital, Crosslink Capital, and Tenaya Capital. BetterUp has a unique approach to personalized learning, combining world-class coaching with AI technology and behavioral science to deliver personalized behavior change. This approach improves the well-being, adaptability, and effectiveness of the workforce. BetterUp's technology significantly impacts individual learning experiences and outcomes by offering a blend of one-on-one coaching, counseling, and mentorship at scale, all underpinned by AI-driven insights. This startup is particularly exciting in the edtech field because it addresses critical aspects of professional development, including mental fitness, leadership, and career development. Its focus on whole-person growth and development and its use of AI to tailor learning experiences make BetterUp a transformative force in the realm of educational technology and employee wellness. 16. Outschool Year Founded: Outschool was founded in 2015. Location: The company is headquartered in San Francisco, California. Funding Amount/Type: Outschool has raised a total of $130 million in venture capital. Funding Series: Their latest funding was a Series D round of $110 million, leading to a valuation of $3 billion. Major Investors: Coatue and Tiger Global Management led the Series C round, and Tiger Global Management led the Series D round. Outschool's innovative approach in edtech involves an online platform offering diverse virtual classes for children. It emphasizes small-group, after-school activities covering a wide range of subjects from fun to academic. The platform's mix of ongoing and single classes accommodates various learning preferences, personalizing the educational experience. The company's adaptability to children's changing interests with its wide-ranging course offerings, from academic topics to creative pursuits, is a key aspect of its impact. Its rapid growth, particularly during the pandemic, underscores its success in meeting the growing need for flexible and accessible online learning. Outschool stands out in edtech for its ability to expand educational opportunities beyond conventional boundaries, making learning more diverse, accessible, and engaging. 17. Udemy Year Founded: Udemy was founded in 2010. Location: The company is headquartered in San Francisco, California, United States. Funding Amount/Type: Udemy has raised significant funding through various series, including a Series A of $3 million in October 2011, Series B of $12 million in December 2012, Series C of $32 million in May 2014, and a Series D of $65 million in June 2015. Additionally, they received $60 million from Naspers Ventures in June 2016 and $50 million from Benesse Holdings in February 2020. Funding Series: The company went through multiple funding series from Series A to Series D and beyond. Major Investors: Major investors include Groupon investors Eric Lefkofsky and Brad Keywell, Insight Ventures, Lightbank Capital, MHS Capital, Learn Capital, Norwest Venture Partners, Stripes, Naspers Ventures, and Tencent Holdings. Udemy's approach to personalized learning is centered around its vast and diverse online course offerings, covering topics from business and technology to personal development. The impact of Udemy's technology on learning is evident in its flexibility and accessibility, allowing learners to access courses at their own pace and according to their own schedules. Udemy is particularly exciting in the field of edtech for its expansive course catalog and its appeal to both individual learners and businesses. By offering courses that range from hobbyist topics to professional skills, Udemy has positioned itself as a comprehensive learning platform suitable for a variety of learners, making education more accessible and flexible. 18. Guild Year Founded: Guild was launched in 2015. Location: The company is headquartered in Denver, Colorado, United States. Funding Amount/Type: Guild Education has raised a total of $378.5 million in funding. Funding Series: The company has undergone various rounds of funding, including a significant Series D round in 2019. Major Investors: Some of the notable investors in Guild include Salesforce, Harrison Metal, Bessemer Venture Partners, and Felicis Ventures. Guild's approach in edtech is distinguished by its partnerships with major corporations to offer their employees debt-free educational programs. This involves collaborating with a network of nonprofit universities and learning providers to enhance employee education and career growth. Focusing on working adults, Guild uniquely supports their career development through accessible education. The impact of Guild's services is profound for the workforce of its partnering companies, aiding in upskilling and personal development. This enhances employees' career opportunities and growth. Guild's innovation lies in its business model that merges corporate interests with employee educational benefits. This strategy supports workforce development and meets the changing demands of today's workplace, positioning Guild as a progressive player in the edtech sector. Get Connected With EdTech Investors Today Through Visible The EdTech startups highlighted in this article showcase a wide array of innovative approaches and diverse solutions, ranging from personalized AI-driven learning to digital safety in education. Each startup is forging a unique path in reshaping the educational landscape, emphasizing accessibility, engagement, and efficiency. For those interested in connecting with investors in the EdTech space, check out our Connect investor database with a prefiltered list of ed-tech investors. After finding the right Investor you can create a personalized investor database with Visible. Combine qualified investors from Visible Connect with your own investor lists to share targeted Updates, decks, and dashboards. Start your free trial here. Related resource: 10+ Founder Friendly Venture Capital Firms Investing in Startups

Simple Agreement for Future Equity (SAFE) is a financing tool for startups, offering a simpler, more flexible alternative to traditional equity or debt financing. Crucial in the startup ecosystem, SAFE agreements streamline the fundraising process, particularly for early-stage companies. They allow investors to convert their investment into equity at a later financing round, typically at a discounted price. This tool is significant in the startup landscape for its simplicity, efficiency, and founder-friendly nature, making it highly popular among early-stage startups. This guide will explore SAFE's definition, its role in early-stage funding, components like valuation caps and discounts, benefits for startups and investors, and alternatives to SAFE financing. The world of startup financing has been revolutionized by the Simple Agreement for Future Equity (SAFE), an innovative tool designed to simplify and streamline the fundraising process for early-stage companies. SAFE agreements, created by Y Combinator in 2013, offer startups a more accessible and founder-friendly alternative to traditional equity or debt financing methods. Related resource: Investor Agreement Template for Startup Founders Understanding SAFE Agreements Definition and Origins A Simple Agreement for Future Equity (SAFE) is a financing instrument used by startups to raise capital without immediate equity exchange or debt. Developed by Y Combinator in 2013, SAFE agreements provide a more straightforward and flexible approach than traditional equity or debt financing and it was created as an alternative to the more complex convertible notes. SAFEs are a contractual agreement between a startup and an investor, where the investment is converted into equity at a future financing round, usually at a discounted rate or with a valuation cap. This innovation emerged from the need to streamline startup investments, minimizing the legal complexity and costs associated with traditional methods. A Simple Agreement for Future Equity (SAFE) is an innovative financing instrument utilized by startups to secure capital without an immediate exchange of equity or debt. Conceived by Y Combinator in 2013, SAFE agreements offer startups a more straightforward and adaptable approach in contrast to the intricacies of traditional equity or debt financing, providing an alternative to the complexities of convertible notes. Key Differences from Traditional Equity or Debt Financing SAFE agreements differ significantly from traditional equity and debt financing. Unlike equity financing, where investors immediately receive company shares, SAFE does not involve immediate stock issuance. This means there's no immediate equity dilution or valuation requirement. In contrast to debt financing, SAFE is not a loan; it doesn't accrue interest and lacks a maturity date, reducing the financial burden on the startup. These differences make SAFE particularly attractive to startups looking for a less complicated and more flexible financing option. Role in Early-Stage Startup Funding SAFE plays a critical role in early-stage startup funding. Its simplicity and flexibility make it an ideal tool for startups that are too young for a clear valuation but need funding to grow. By deferring valuation to a later stage, it allows startups to focus on growth rather than complex financial negotiations. Additionally, the investor-friendly nature of SAFE, such as potential for future equity at a discounted rate, makes it appealing to investors interested in high-risk, high-reward opportunities typical of early-stage ventures. Components of a SAFE Agreement Standard Terms Breakdown A SAFE agreement typically includes several key terms. The most crucial are the amount of the investment and the conditions under which it converts to equity. Other standard terms include the valuation cap, which sets a maximum company valuation for the conversion of SAFE to equity, and the discount rate, offering investors a reduced price compared to later investors. Additionally, a SAFE may specify whether it includes 'participation rights', giving investors the option to invest in future rounds to maintain their ownership percentage. Valuation Caps, Discount Rates, and Conversion Mechanisms Valuation Cap: This is the maximum valuation at which the investment can convert into equity. It protects investors from dilution in high-valuation future rounds, ensuring they receive more shares for their investment. Discount Rate: It provides investors a percentage discount on the price per share compared to the next financing round. This reward compensates for the early risk taken by the investors. Conversion Mechanisms: Conversion typically occurs during a priced equity financing round, a sale of the company, or an IPO. The terms dictate how the SAFE investment converts into equity - either at the valuation cap or the discounted price, whichever is more favorable to the investor. Related resource: Everything You Should Know About Diluting Shares Impact on Founders and Investors For founders, SAFEs offer a quick and straightforward way to secure funding without immediately diluting equity or establishing a company valuation. This flexibility allows founders to focus on growing the company with less financial and administrative burden. However, they must be mindful of the potential future equity given away, especially when multiple SAFEs are used. For investors, SAFEs provide a simpler alternative to convertible notes, with the potential for high returns if the company succeeds. The valuation cap and discount rate can significantly increase the value of their investment in a successful startup. However, there's a risk as SAFEs don’t guarantee returns and don’t provide immediate ownership or control over the company. Related resource: Why and How You Should Evaluate Startup Team Risk Benefits of using SAFE for startups After understanding the key components of SAFE agreements and how they operate, it's essential to explore the numerous benefits they offer to startups. SAFE agreements are not just a funding tool but a strategic choice for early-stage companies navigating the complex world of startup financing. 1. Faster and Easier Fundraising Reduced Complexity and Legal Costs One of the primary benefits of using SAFE agreements for startups is the reduction in complexity and associated legal costs. Unlike traditional equity agreements, which often involve lengthy negotiations and extensive legal documentation, SAFEs are designed to be straightforward and concise. This simplicity not only accelerates the fundraising process but also significantly lowers the legal fees for both startups and investors. SAFE agreements are meant to be simple, standard, and fair for all parties involved, thereby reducing the need for extensive and expensive legal counsel. Related resource: SAFE Fundraising: When to Consider & Benefits No Need for Valuation Perhaps the most significant advantage of SAFEs for early-stage startups is the deferral of valuation negotiations. Traditional funding methods typically require a startup to set a valuation, which can be challenging and contentious, especially for early-stage companies with limited operational history. SAFEs circumvent this hurdle by postponing the valuation determination until a later funding round, usually when more information is available to accurately assess the company's worth. This aspect allows startups to secure funding more quickly, focusing on growth rather than getting entangled in complex and potentially contentious valuation discussions. 2. Flexibility and Investor-Friendliness Flexibility for Future Rounds SAFEs stand out for their adaptability, which is crucial in the dynamic environment of startup financing. They offer the flexibility to tailor terms such as discount rates and valuation caps to suit different investor preferences and anticipate various future funding scenarios. This flexibility is particularly beneficial for startups that may undergo several rounds of funding, each with unique conditions and requirements. As noted in resources, this adaptability makes SAFEs a versatile tool, capable of evolving with the company's funding needs. Non-dilutive Funding A significant advantage of SAFEs is their non-dilutive nature at the time of investment. Unlike immediate equity exchanges in traditional financing, SAFEs convert to equity only in a subsequent funding round. This feature means that the current ownership of existing shareholders remains undiluted until that point. For founders, this is crucial as it allows them to retain more control over their company in the early stages, as highlighted by startup-focused platforms like SeedInvest. Investor-Friendly Terms SAFEs often incorporate terms that are attractive to investors, making them a compelling option for those looking to invest in startups. Pro-rata rights, for instance, allow investors to maintain their percentage of ownership in future financing rounds. Valuation caps, another common feature, offer investors protection against overvaluation in future rounds. These investor-friendly provisions, as explained by Y Combinator, ensure that SAFEs are not only beneficial for startups but also provide fair and appealing terms for investors. 3. Aligned Incentives Shared Success One of the key advantages of SAFE agreements is the alignment of incentives between investors and founders, which is foundational for a successful startup journey. As both parties stand to benefit from an increase in the company's valuation at the time of future equity rounds, there is a mutual interest in the company's growth and success. This alignment, as discussed in resources from Y Combinator, creates a partnership dynamic where both investors and founders are equally motivated to increase the company's value, ensuring that their interests are in sync. Motivation for Growth SAFEs serve as a powerful motivational tool for founders. Since the conversion terms of SAFEs are typically more favorable at higher valuations, founders are incentivized to drive their company toward substantial growth and a successful exit. This motivation aligns perfectly with the startup's objective of maximizing value, as highlighted by startup financing experts. With SAFEs, the potential future rewards for founders increase with the company's valuation, encouraging them to pursue ambitious growth strategies and operational excellence. 4. Streamlined Process No Interest or Maturity Dates SAFEs offer a streamlined and less burdensome process for startups, primarily due to their lack of interest rates and fixed maturity dates. Traditional debt instruments typically accrue interest over time and have a set date by which the loan must be repaid or converted. In contrast, as outlined in resources like SeedInvest, SAFEs eliminate these complexities. This lack of interest and maturity dates simplifies the investment process, freeing startups from the pressures and administrative challenges associated with regular debt servicing or renegotiation at maturity. No Debt Obligations Another significant advantage of SAFEs is that they are not debt instruments. This distinction means that in the event of a startup's failure, there is no obligation to repay the investors, as would be the case with traditional loans. This feature, highlighted by experts at Y Combinator and other startup-focused platforms, significantly reduces the financial risk for founders. By not carrying debt on their balance sheets, startups can operate with more financial freedom and less stress, focusing their resources on growth and development rather than on managing debt repayments. 5. Early-Stage Suitability Ideal for Early-Stage Startups SAFEs are notably beneficial for early-stage startups, primarily due to their adaptability and minimal prerequisites. Early-stage companies often lack extensive financial history, making it challenging to secure traditional equity financing. As Y Combinator points out, these agreements are tailor-made for such companies. They provide a viable funding option without the need for a lengthy track record or established market presence, thus bridging the gap between nascent operations and potential investors. Minimal Financials Required Another advantage of SAFEs is the minimal financial documentation required. Unlike traditional financing methods that may demand detailed financial projections and comprehensive business plans, SAFEs operate with far less stringent requirements. This aspect, as highlighted by startup financing experts, makes SAFEs particularly accessible for early-stage companies that may not have the resources or data to produce extensive financial documentation. It allows startups to focus on growth and development rather than on preparing intricate financial models. 6. Attractive for Investors Potential for High Returns For investors, SAFEs represent an opportunity for substantial returns, especially if the startup experiences a successful exit. This investment model offers the potential for significant returns on investment, contingent upon the startup's future success. The prospect of acquiring equity at a lower price point than future investors makes SAFEs an attractive proposition for those looking to invest in high-potential startups. Flexibility and Potential Discounts SAFEs also provide investors with flexibility and the prospect of discounts on future equity. Investors can negotiate terms such as valuation caps and discount rates. This flexibility ensures that investors can tailor the terms of their investment to suit their risk profiles and investment strategies. The potential discounts on future equity rounds further enhance the attractiveness of SAFEs, providing investors with a strategic advantage in future financing scenarios. Alternatives to SAFE While SAFEs are a popular choice for startup financing, it's important for founders to consider other available options. Each alternative, from traditional equity financing to convertible notes and crowdfunding, offers unique benefits and fits different startup needs. Related resource: The Startup’s Guide to Investor Agreements: Building Blocks of VC Funding Traditional Equity Financing Pros: Provides immediate capital injection, can offer higher valuations for established companies, and gives investors greater ownership and control. Cons: Complex and time-consuming process, requires detailed financial projections and legal documents, can be dilutive for founders and early investors. Convertible Notes Pros: Simpler and faster than traditional equity, offers lower valuation cap flexibility, and can convert to equity automatically upon certain events. Cons: May not be as attractive to some investors, can be dilutive for founders depending on conversion terms, and often includes interest accrual. Debt Financing Pros: Can be secured quickly and with minimal paperwork, doesn't dilute company ownership, and provides fixed interest payments. Cons: Requires repayment with interest, can burden the company with additional debt, and may not be ideal for high-growth startups. Revenue-Based Financing Pros: Provides funding based on future revenue, aligns investor returns with company performance, and doesn't involve immediate dilution. Cons: May not be suitable for companies with unpredictable revenue streams, can be expensive due to higher interest rates, and can give investors control over certain financial decisions. Crowdfunding Pros: Raises capital from a large pool of individual investors, generates marketing buzz, and builds community around the company. Cons: May be challenging to reach fundraising goals, can be time-consuming and require significant effort, and offers limited investor oversight and control. Grants and Public Funding Pros: Non-dilutive funding source, ideal for social impact or research-oriented ventures, and offers access to valuable resources and mentorship. Cons: Highly competitive and challenging to secure, often comes with specific eligibility requirements and restrictions, and may not provide ongoing financial support. Learn more about SAFE & Fundraising with Visible This guide has outlined the essential aspects of SAFE agreements, highlighting their role in simplifying fundraising and aligning investor-founder interests, especially for early-stage startups. However, navigating the intricacies of startup financing goes beyond understanding SAFEs. This is where Visible comes in. Visible offers a suite of tools designed to assist founders in managing investor relations, tracking key metrics, and streamlining communication with stakeholders. For more insights into your fundraising efforts, Visible is the go-to platform. Raise capital, update investors, and engage your team from a single platform. Try Visible free for 14 days. Related resources: A Complete Guide on Founders Agreements VC Fund Performance Metrics 101

In the startup world, the 'Valley of Death' refers to a critical phase where emerging businesses face their greatest financial challenges. During this time, startups often grapple with increasing expenses and limited revenue, testing their ability to evolve from innovative concepts to sustainable, profitable entities. Successfully navigating this precarious phase is crucial for a startup's survival and future growth. It demands astute resource management, strategic planning, and resilience. For entrepreneurs, understanding and effectively maneuvering through the Valley of Death can mean the difference between a startup's flourishing success and its untimely demise. What is the Death Valley Curve for Startups? The Death Valley Curve is a metaphorical representation of the significant financial challenges startups face after their initial launch. During this period, companies typically encounter mounting costs and insufficient revenues, leading to a precarious financial situation. This phase is crucial as startups must demonstrate their ability to transition from a promising concept to a viable, profitable business model. Understanding and preparing for this curve is vital for any entrepreneur aiming to lead their startup to success. 6 Effective Tips for Surviving the Valley of Death Surviving the Valley of Death requires more than just passion and a great idea. It demands a strategic approach, encompassing careful resource management, innovative funding solutions, team resilience, market validation, networking, and adaptability. The following six tips provide a roadmap for startups to not only survive but also to emerge stronger from this challenging phase. 1. Conserve Your Resources Cash is King: Effective cash management is crucial for the survival and growth of any startup. It's essential to diligently track your burn rate – the rate at which you're spending cash before reaching profitability. Prioritizing essential expenses helps to extend your financial runway, giving your business more time to achieve sustainable growth. Explore cost-effective alternatives in every aspect of your operations. Additionally, negotiation is a powerful tool; engaging in talks with suppliers to strike better deals can lead to significant cost savings. Sharpen Your Focus: In a startup, resources, including time and effort, are precious. It's important to focus these resources on activities that align directly with your startup's core value proposition. Cutting down on non-core activities helps streamline operations and ensures that every effort contributes towards addressing your target market's needs and solving their problems. Concentrating on your core mission not only conserves resources but also increases the impact and effectiveness of your work. 2. Get Creative with Funding Bootstrapping: Bootstrapping involves funding your startup using personal savings, revenue, or other internal resources, without the need for external investors. This approach offers full control over the business, encouraging financial discipline and lean operations. Key strategies include minimizing expenses, prioritizing revenue generation, and seeking strategic partnerships to share resources and minimize costs. It's important to note that while bootstrapping can foster a strong sense of ownership and agility, it may also mean slower growth and requires the entrepreneur to shoulder more financial risk. Strategic Partnerships: Forming strategic partnerships with other businesses can provide numerous benefits, including shared resources, access to new audiences, and pooling of expertise. This approach not only helps in conserving financial resources but also opens up new opportunities for growth and innovation. When looking for partners, identify companies with complementary offerings or shared target markets, and develop a compelling value proposition that highlights the mutual benefits of the partnership. By employing these creative funding strategies, startups can extend their financial runway, leverage their existing assets more effectively, and lay a stronger foundation for sustainable growth. Related resource: How to Secure Financing With a Bulletproof Startup Fundraising Strategy Related resource: Startup Fundraising Checklist Related resource: The Ultimate Guide to Startup Funding Stages 3. Strengthen Your Team Hire Strategically: For startups, building a lean yet effective team is essential. Prioritize hiring individuals with diverse skill sets who are capable of taking on multiple roles. This approach not only maximizes resources but also fosters a dynamic and versatile work environment. A strategic hiring plan involves aligning your team with your business goals and conducting skills gap analyses to identify the talent you need. Also, consider candidates' potential for growth and adaptability, as startups often face rapid changes and require a workforce that can evolve with the business. Foster Resilience: Cultivating a culture of optimism, adaptability, and problem-solving is key to handling setbacks and pivoting when necessary. Building a company culture that values resilience and adaptability starts with your hiring process. Look for candidates who are not only skilled but also align with your company's values and mission. This alignment can lead to increased job satisfaction, lower turnover rates, and a stronger commitment to the organization's success. Encourage a mindset that views challenges as opportunities for growth and innovation, which is vital in the fast-paced startup environment. 4. Validate Your Market Fit Gather Data: Continuously collecting customer feedback is crucial in validating your market fit. Use surveys, A/B testing, and user interviews to gather insights. This approach allows you to iterate and refine your offering based on actual user needs and preferences. As highlighted by ProductPlan, start by defining your customer, understanding their problems, and how your product solves these problems. Then, test these assumptions with potential customers to find the truth about your market fit. Focus on Metrics: Avoid the trap of vanity metrics that don't translate to real business value. Instead, focus on identifying and tracking Key Performance Indicators (KPIs) that align with your long-term goals. A successful product-market fit means having a product that the market loves and can't live without. You can measure this by surveying your customers, and asking how they would feel if they could no longer use your product. A strong indicator of product-market fit is if at least 40% of respondents say they would be very disappointed. Additionally, consider using the Net Promoter Score or the Sean Ellis Test as reliable indicators of customer satisfaction and product-market fit. Implementing these strategies will help you understand whether your product truly satisfies market demands and sets the foundation for sustainable growth. 5. Network and Build Relationships Seek Mentorship: Mentorship is a vital asset for startup founders and their teams. A mentor, leveraging their experience, skills, and knowledge, can provide valuable advice and guidance, helping to navigate the complexities of entrepreneurship. Studies show that startups mentored by successful entrepreneurs have significantly higher success rates. Mentors can introduce you to their network, offer practical advice, and support you through the ups and downs of entrepreneurship, boosting morale, confidence, and the startup’s overall success. Attract Investors: Participating in industry events is a key strategy for attracting potential investors. These events provide opportunities to network, gain feedback, and form partnerships that can benefit your startup in various ways. When networking, it’s important to focus on building a strong network that can leverage more leverage with investors. A robust network increases brand awareness, making your startup more attractive to investors. Networking also helps in acquiring new customers and validating your market, thus making your startup a more appealing investment. 6. Stay Agile and Adaptable Embrace Change: In the ever-evolving startup landscape, flexibility is key. Don't hesitate to pivot your product or strategy in response to market feedback and changing needs. This agility allows you to stay relevant and competitive. As research and case studies have shown, organizations that embrace agility and adaptability see significant improvements in performance, innovation, and customer engagement. An example is Spark, a telecom operator in New Zealand, which achieved substantial growth and market share by adapting to customer needs and market trends. Learn from Mistakes: View setbacks as critical learning opportunities. Analyzing what went wrong and refining your approach is integral to growth and resilience. Adaptability in leadership strategy is particularly crucial in startups. Regularly reassessing and adapting your leadership approach in response to business changes, milestones, and pivot moments is essential for success. Failure to do so can result in significant consequences, as seen in case studies where leadership inflexibility led to lost momentum and even replacement of founders. Learn more with Visible Navigating the Valley of Death is a pivotal phase in the startup lifecycle. By conserving resources, getting creative with funding, building a resilient team, validating market fit, networking, and remaining agile, startups can effectively traverse this challenging terrain. Use Visible to manage every part of your fundraising funnel with investor updates, fundraising pipelines, pitch deck sharing, and data rooms. Raise capital, update investors, and engage your team from a single platform. Try Visible free for 14 days.

Pivoting in the startup world is not just a strategy; it's a survival skill. In the ever-evolving business landscape, agility and adaptability are key to staying relevant and successful. This guide will cover the critical strategies that can help founders navigate through changes effectively. We'll explore when to pivot, understanding why to pivot, how to execute your pivot, and the different types of pivots that turn challenges into opportunities. Understanding When It’s Time for a Startup to Pivot Pivoting, a strategic shift in business model or product can be the difference between thriving and merely surviving. Founders should be alert to certain indicators that signal a need for change. Identifying the right time to pivot requires a combination of market awareness, customer feedback, and internal business analysis. Founders must be agile, ready to adapt, and willing to embrace change to ensure their startup's longevity and success. By paying close attention to these indicators, startups can pivot effectively, turning potential challenges into opportunities for growth and innovation. Here are some key signs and factors to consider: Identifying Signs That Your Startup Needs a Change Stagnating Sales and Growth: A clear sign that a pivot may be necessary is when your startup experiences stagnant or declining sales. This often indicates that your product or service may no longer be meeting market demands or that competition has intensified. Difficulty in Attracting or Retaining Customers: If acquiring new customers becomes increasingly challenging, or if existing customers are leaving, this could suggest that your product is not resonating with your target audience. Inconsistent Cash Flow: Erratic or declining cash flow can be a symptom of deeper problems in your business model or market fit, suggesting that a strategic pivot could be necessary. Feedback from Customers and Employees: Regular feedback, both from customers and team members, can provide invaluable insights. If there are consistent concerns or suggestions for improvement, it's worth considering whether these point towards a pivot. Technological Changes and Industry Shifts: Rapid technological advancements or shifts in industry trends can render your current business model or product obsolete. Staying abreast of these changes and being willing to adapt is essential. Market Trends and Customer Feedback as Pivot Indicators Evolving Market Trends: Market trends can offer predictive insights into what changes may be necessary. By analyzing industry reports and market research, you can anticipate shifts and adapt your business accordingly. This is especially true in fast-evolving sectors like technology and consumer goods. Customer Feedback and Demand: Customer feedback is a direct line to understanding market needs. Regular surveys, focus groups, and review analyses can reveal changing customer preferences and unmet needs. Successful companies are those that adapt their products and services based on customer input. Competitor Movements: Observing your competitors can provide clues about market shifts. If competitors are pivoting or introducing new products, it may indicate emerging opportunities or threats that you should consider. Data-Driven Insights: Utilizing data analytics to track customer behavior, market trends, and business performance can highlight areas needing improvement or change. Forbes notes the rising importance of data-driven decision-making in identifying market opportunities and risks. Planning Your Startup Pivot Embarking on a pivot is a significant step, requiring careful planning and execution. 1. Introspection and Analysis The first critical step in considering a pivot for your startup is introspection and analysis. This involves a deep dive into your current business performance and understanding the internal and external factors that affect your venture. Here’s how to approach it: Gather Data Assess Current Performance: Start by collecting and analyzing data related to your startup's current performance. This encompasses user feedback, sales figures, and market trends. User Feedback: User feedback is a goldmine of insights. Collect this through surveys, social media interactions, and customer support communications. According to a study in the Journal of Marketing, customer feedback is crucial in identifying product strengths and weaknesses, allowing businesses to align their offerings more closely with market needs. Sales Figures: Analyze your sales data. Look for trends such as which products or services are performing well and which aren’t. This analysis can reveal a lot about customer preferences and market demand. Market Trends: Stay informed about your industry's market trends. Tools like Google Analytics can provide valuable data on market behavior and preferences, guiding you toward potential areas of improvement or innovation. Identify Patterns: Look for patterns in the data. What are the consistent strengths across your offerings? Where are the recurring complaints or issues? This helps in pinpointing what's working and what's not. Areas of Potential Improvement: From the patterns you identify, determine areas that require improvement. This could range from product features, and customer service enhancements, to marketing strategies. Conduct a SWOT Analysis Strengths: Identify what your startup does best. This could include a unique product feature, a strong brand identity, or an exceptional customer service approach. Knowing your strengths helps in leveraging them effectively during a pivot. Weaknesses: Recognizing and addressing weaknesses can significantly bolster a company's strategic planning. These could be limited resources, lack of expertise in certain areas, or operational inefficiencies. Opportunities: Look for external opportunities that your startup can capitalize on. These could be market gaps, emerging trends, or changes in consumer behavior. For instance, a Forbes article highlights how businesses can turn market disruptions into opportunities by adapting their strategies. Threats: Identify external threats, such as competitive pressure, market changes, or technological advancements. Understanding these threats is crucial for developing strategies to mitigate them. Conducting a thorough introspection and analysis is fundamental for any startup contemplating a pivot. It allows you to make informed decisions based on empirical data and a comprehensive understanding of your business's strengths, weaknesses, opportunities, and threats. This strategic approach not only guides your pivot decision but also enhances the overall resilience and adaptability of your startup. 2. Defining the Pivot Once you have a clear understanding of your startup's current situation through introspection and analysis, the next step is to define the pivot. This stage is about exploring various pivot options and validating them to ensure they address market needs effectively. Identify Pivot Options Brainstorming Pivot Options: Utilize the insights from your data analysis and SWOT analysis to brainstorm potential pivot options. This can include: Pivoting Your Product: This could mean altering the features, functionality, or even the entire concept of your product. For instance, a tech startup might shift from a software product to a platform-based service model. Target Market Pivot: Sometimes, the product is fine, but the target market needs to change. This pivot involves redefining your audience, perhaps focusing on a different demographic or geographic region. Pricing Strategy Pivot: Adjusting your pricing model can make your product more appealing. This could be moving from a one-time purchase to a subscription model or introducing tiered pricing. Business Model Pivot: This involves changing the fundamental way in which your business operates. For example, a company might switch from a direct-to-consumer model to a B2B model. Addressing Market Needs: Ensure that your pivot addresses a clear pain point or unmet need in the market and align your pivot strategy with those market needs. Validate Your Ideas Testing with Potential Customers: Don’t rely solely on assumptions or gut feelings. Validate your pivot ideas by testing them with potential customers. Conduct Surveys: Surveys can be a quick way to gauge customer interest in your new direction. Tools like SurveyMonkey or Google Forms can facilitate this process. Interviews: One-on-one interviews provide in-depth insights. These conversations can uncover nuanced opinions and feedback about your pivot idea. A/B Testing: For product or feature pivots, A/B testing can be invaluable. This involves presenting two versions of your product to the audience and measuring which one performs better. Pilot Programs: Launching a pilot or beta version of your pivot can provide real-world feedback before a full-scale rollout. Gathering Feedback: The feedback from these validation methods should guide your decision-making process. Related source: Business Startup Advice: 15 Helpful Tips for Startup Growth 3. Building the Pivot Plan After defining the pivot, the next crucial step is to build a structured plan to implement it. This involves setting clear goals, establishing a realistic timeline and budget, and effectively communicating the pivot to all stakeholders. Set SMART Goals Specific, Measurable, Achievable, Relevant, and Time-bound Goals: SMART goals are essential for a successful pivot. They provide clarity and direction, ensuring that every step you take aligns with your pivot strategy. Specific: Clearly define what you aim to achieve with your pivot. For example, if you're pivoting to a new customer segment, specify who this new target audience is. Measurable: Establish criteria for measuring progress towards your goals. This could include metrics like customer acquisition rates, revenue targets, or market share. Achievable: Set realistic and attainable goals, considering your startup's resources and capabilities. Relevant: Ensure that your goals are aligned with your overall business objectives and market needs. Time-bound: Assign a clear timeline to your goals. This helps maintain momentum and allows for timely progress tracking. Related resource: 6 Metrics Every Startup Founder Should Track Develop a Timeline and Budget Creating a Realistic Timeline: According to Project Management Institute, effective timeline planning is critical in project management. Break down the pivot process into manageable tasks and assign deadlines to each. This helps in tracking progress and ensures that the pivot stays on schedule. Allocating Resources and Budget: Determine the resources and budget required for each stage of the pivot. This includes financial resources, human capital, and any other necessary assets. A well-planned budget is vital for allocating resources efficiently and avoiding financial overstretch. Prioritizing Tasks: Identify which tasks are critical and need immediate attention and which can be scheduled later. This prioritization ensures that resources are allocated effectively to areas with the most impact. Communicate the Pivot Clear Communication with Team and Stakeholders: Transparency is key when communicating the pivot. Explain the rationale behind the pivot, the expected outcomes, and how it will impact various aspects of the business. Engaging with Investors and Customers: Keep your investors informed about the pivot and how it aligns with the long-term goals of the startup. For customers, emphasize how the pivot will benefit them or improve their experience with your product or service. Open Communication Channels: Establish open lines of communication for feedback and questions. This can include team meetings, investor updates, and customer newsletters. Effective communication in change management builds trust and fosters a collaborative environment. 4. Execution and Adaption The execution and adaptation phase is where your pivot plan comes to life. It's crucial to approach this phase with agility and a focus on continual learning and adjustment. Here's how to navigate it effectively: Be Agile and Iterative Adapting to Feedback and Market Conditions: The ability to quickly adapt your plan based on new information is vital. Agility in business allows companies to respond rapidly to changes in the internal and external environment without losing momentum. Embracing an Iterative Approach: Implement your pivot in stages, and be prepared to make changes as you gather more information. This iterative process is similar to the agile methodology used in software development, which encourages adaptive planning and continuous improvement. Willingness to Adjust: Don't hesitate to revisit and revise your plan if necessary. According to Forbes, successful pivots often involve a series of adjustments rather than a single, monumental shift. This approach allows you to refine your strategy based on real-world feedback and performance. Measure and Track Progress Monitoring Key Performance Indicators (KPIs): Regularly track KPIs that are aligned with the goals of your pivot. This could include metrics such as customer acquisition cost, customer lifetime value, revenue growth, or market penetration. Analyzing Data: Use data analytics tools to delve into the performance data. This analysis will give you insights into what aspects of your pivot are working and which areas need improvement. Making Adjustments for Optimization: Based on your KPI analysis, make informed adjustments to optimize your results. This could involve tweaking your marketing strategy, refining your product offering, or reallocating resources to more effective channels. 5. Building Resilience Embarking on a pivot is a journey filled with challenges and opportunities. Building resilience throughout this process is essential for both personal growth and the success of your startup. Here’s how to cultivate resilience during a pivot: Embrace the Challenge Preparedness for Setbacks and Roadblocks: Understand that pivots are rarely smooth and straightforward. They should be viewed as opportunities for learning and growth rather than just obstacles. Staying Positive: Maintaining a positive outlook is crucial. This mindset will help you navigate through tough times more effectively. A study in the Journal of Positive Psychology shows that positivity enhances resilience, enabling individuals to better cope with challenges and stress. Learning from Mistakes: Every setback or mistake is a learning opportunity. Reflect on what went wrong, what you could have done differently, and how you can avoid similar mistakes in the future. Perseverance: Persistence is critical during a pivot. The ability to keep pushing forward, even when faced with difficulties, is what often separates successful pivots from unsuccessful ones. Surround Yourself with Support Building a Support Network: Cultivate a network of mentors, advisors, and fellow entrepreneurs. These individuals can provide invaluable guidance, support, and insight based on their experiences. Leveraging Mentorship and Advice: Engage with mentors who can offer advice and perspectives that may not be apparent from within your organization. Their objective viewpoint can be crucial in decision-making and strategy refinement. Connecting with Fellow Entrepreneurs: Fellow entrepreneurs can provide empathy and understanding, having gone through or currently facing similar challenges. Platforms like LinkedIn, entrepreneurial forums, or local business groups can be great places to connect with like-minded individuals. Seeking Encouragement: Encouragement from your network can be a powerful motivator during challenging times. Sometimes, a simple word of encouragement can provide the boost needed to overcome a tough phase. Types of Startup Pivots Every startup's pivot journey is unique, often involving different types of changes. Customer Segment Pivot A Customer Segment pivot is when a startup shifts focus to a new group of customers who may have a greater need or appreciation for its product. This pivot often occurs after identifying a more responsive or profitable market segment. Key steps for a successful Customer Segment pivot include: Listen to Your Users: Understanding user feedback is vital. If users are consistently pointing out certain features or suggesting improvements, it could indicate a new direction for the product. Reanalyse Your Competition: Analyze how competitors address the needs of different customer segments. This can offer insights into gaps in the market and potential opportunities. Speak Your Users’ Language: Communication is key. Ensure that your messaging resonates with the new target audience and clearly conveys the value proposition. Pivot Sooner Rather Than Later: If a pivot is necessary, it's usually better to act swiftly to avoid wasting resources and to stay ahead of market changes. Ensure Team Alignment: Make sure your team understands and supports the pivot. This might involve changes in roles or the introduction of new skill sets. This pivot requires understanding diverse market segments, adapting the product or service, and effective execution. Product Pivot A Product Pivot in a startup involves making significant changes to the product itself, which can include altering features, the operating platform, or even the core problem the product aims to solve. Several successful startups have executed product pivots effectively: Twitter // X: Started as Odeo, a podcasting platform, Twitter pivoted to become a microblogging service. This pivot was initiated when Apple dominated the podcasting industry with iTunes Podcasts, leading Twitter to reinvent itself. Instagram: Initially a location-based check-in app named Burbn, Instagram pivoted to focus solely on photo sharing after recognizing that this feature was more popular among users. Wistia: Began as a video-sharing community, Wistia pivoted to become a video marketing platform for businesses, responding to the interest shown by businesses in using the platform for hosting and analyzing marketing videos. PayPal: Initially a digital wallet for Palm Pilots, PayPal pivoted to an online payment platform, adapting to the growing demand for online payment solutions. Pinterest: Started as Tote, a social shopping app, Pinterest pivoted to become a visual discovery platform when they realized users were more interested in organizing and sharing images. Groupon: Originally a platform for mobilizing collective action for social causes, Groupon pivoted to a daily deals marketplace, capitalizing on the potential of offering discounted deals to consumers. Value Proposition Pivot In a Value Proposition Pivot, a startup fundamentally changes the core value or benefit its product offers to customers. This pivot might involve redefining what the company stands for or altering its key selling points. Essentially, it's about shifting the product's unique value to better align with market demands or to differentiate from competitors. For instance, a tech startup might pivot from offering just a productivity tool to positioning it as a comprehensive solution for remote work management, changing its core value from mere functionality to an all-in-one platform addressing the emerging needs of remote teams. This type of pivot requires a deep understanding of customer needs, market trends, and a reevaluation of the company's strengths and capabilities. The effectiveness of a Value Proposition Pivot depends on the startup's ability to clearly communicate the new value to its target audience and ensuring that this shift resonates with customer needs and preferences. It's not just about changing the product; it's about changing the perception and experience of the product in the eyes of the customer. Business Model Pivot In a business model pivot, startups undergo a major transformation in how they generate revenue. This could mean changing from a subscription to a freemium model, or altering the overall revenue strategy. Such pivots are not minor adjustments but represent significant shifts in the company's financial and operational approach. For example, a company might pivot from direct sales to a freemium model to broaden its user base and create diverse revenue streams. Alternatively, pivoting from a high-touch service model to an automated approach could reduce costs and facilitate scaling. The success of a business model pivot hinges on aligning the new model with the company's vision and market demands. It often requires market research, re-evaluation of customer needs, and possibly rebranding. Effective pivots leverage the company's strengths while adapting to market changes and customer preferences. For founders, a business model pivot necessitates a thorough assessment of its impact on all business facets, from product development to customer relations. This strategic shift can lead to new growth and sustainability in a dynamic business environment​​​​. Technology Pivot In a technology pivot, a startup fundamentally changes the technology or platform underlying its product or service. This pivot can be driven by various factors, such as advancements in technology, the need to improve scalability or performance, or the discovery that users prefer a particular feature of the product. For founders considering a technology pivot, it's crucial to assess not only the technological feasibility of the pivot but also how it aligns with your business goals and customer needs. This strategic shift, although challenging, can open up new opportunities and pathways for growth and sustainability in a fast-evolving technological landscape​​​​. Real-Life Startup Pivot Examples With Glowing Success Successful pivots by well-known companies can provide inspiration and insight into the process. Netflix Original idea: A DVD-by-mail rental service. Pivot: Anticipated the shift to streaming media and introduced a streaming service, eventually phasing out DVDs. Result: Became a global streaming giant with over 220 million subscribers and a pioneer in producing original content. PayPal Original idea: A mobile payments platform called Confinity, enabling payments between Palm Pilots. Pivot: Expanded to online payments and integrated with eBay, becoming a leading online payment service. Result: Revolutionized e-commerce transactions and expanded into a global financial services company. Nintendo Original idea: A manufacturer of playing cards. Pivot: Expanded into electronic toys and video games, becoming a pioneer in the gaming industry. Result: Evolved into a renowned video game company with iconic franchises like Mario and Zelda. Looking To Pivot Your Startup? Connect With Visible Today Pivoting a startup is a dynamic and challenging journey, but with the right strategies, it can lead to remarkable success and resilience. If you're looking to pivot your startup, remember the importance of data-driven decision-making, clear communication, and adaptability. For further support and guidance, consider partnering with Visible. Use Visible to manage every part of your fundraising funnel with investor updates, fundraising pipelines, pitch deck sharing, and data rooms. Raise capital, update investors, and engage your team from a single platform. Try Visible free for 14 days. Related resource: The Ultimate Guide to Startup Funding Stages

FinTech startups have revolutionized the financial sector in recent years, blending technology and finance to enhance, simplify, and democratize financial services. These innovative companies are reshaping how we handle money, from mobile banking and cashless transactions to complex financial algorithms. As a founder, understanding the landscape of these trailblazers is crucial. They're not just altering consumer habits but are also reshaping the very fabric of the global financial system. Related resource: FinTech Venture Capital Investors to Know 1. Chime Location: San Francisco, United States. Year Founded: 2012. Funding Series/Amount: Raised a total of $2.3 billion over several funding rounds. Prominent Investors: The Series G round was led by Sequoia Capital and included other notable investors. Chime is a leading FinTech company offering mobile banking services through partners like The Bancorp Bank and Stride Bank. Known for its fee-free banking products, including checking accounts with no minimum balance and an automated savings feature, Chime emphasizes customer convenience and accessibility. A standout service is SpotMe, a program allowing fee-free overdrafts up to $100. Chime's innovative approach, deviating from traditional banking practices, has made it a significant figure in modernizing personal banking services, catering to a large customer base seeking alternatives to conventional banks. 2. Stripe Location: Headquarters in San Francisco. Year Founded: 2010. Funding Series/Amount: Raised $8.7b billion over multiple funding rounds. Prominent Investors: Early-stage investors include Sequoia Capital, General Catalyst, and Founders Fund. Angel investors like Elon Musk and Peter Thiel also contributed in the seed round. Later stages saw participation from Allianz X, Axa, Baillie Gifford, Fidelity Management & Research Company, and Ireland’s National Treasury Management Agency. Stripe is a key player in online financial services, specializing in payment processing for internet businesses. The company offers a range of services, including e-commerce, subscription management, and invoicing solutions, and has developed a point-of-sales device, Terminal. Stripe's business model is based on charging a percentage of the transaction value and a fixed fee per transaction. With its innovative technology and global reach, Stripe has become integral to the growth of digital commerce and financial services, expanding its influence through strategic acquisitions and investments in the FinTech sector. 3. Plaid Location: Headquartered in San Francisco. Year Founded: 2013. Funding Series/Amount: Raised $425 million in a Series D funding round. Prominent Investors: The Series D round included investors such as Altimeter Capital, Silver Lake Partners, and Ribbit Capital. Plaid facilitates data connectivity between financial institutions, consumers, and digital finance applications. Their technology integrates traditional banking systems with modern financial apps, enhancing user experiences across personal finance, lending, and payment solutions. Plaid's significant role in the FinTech sector stems from its innovative approach in linking the conventional banking sector with the digital financial world, making it a vital contributor to the evolution of financial services. 4. Affirm Location: San Francisco, California, USA Year Founded: 2012 Funding Series/Amount: Not specifically disclosed but the company has raised significant funding over the years. Affirm is a notable financial technology company known for its innovative approach to digital and mobile-first commerce. The company specializes in offering flexible payment solutions, primarily through its "buy now, pay later" (BNPL) service, which has become increasingly popular in online retail. Affirm's services are designed to provide consumers with more transparent and manageable payment options compared to traditional credit. The company's business model is based on partnerships with merchants where Affirm's payment options are integrated into the checkout process. This model benefits consumers by providing immediate purchasing power with the flexibility of paying over time. Merchants benefit from potentially increased sales and customer loyalty. Affirm earns revenue through commissions from merchants and interest on loans to consumers, with a commitment to not charging late fees. The company's emphasis on using data analytics and machine learning to assess credit risk and fraud detection further enhances its service efficiency. By catering to a range of industries, including electronics, travel, and health and beauty, Affirm has established itself as a key player in the evolving fintech landscape, adapting to changing consumer behaviors and the increasing shift towards online shopping​​​​​​. 5. Revolut Location: London, England Year Founded: 2015 Funding Series/Amount: Total funding of $1.7 billion Prominent Investors: SoftBank, Tiger Global Management Revolut is recognized as one of the UK's most valuable financial technology startups, with a market valuation of $33 billion as of July 2021. Revolut's financial services are comprehensive, offering a pre-paid debit card, currency and cryptocurrency exchange, money transfer, stock trading, and other solutions. This wide array of services has positioned Revolut as a versatile player in the FinTech sector. The company's business model revolves around its platform, which caters to both personal and business banking needs. Revolut's innovation lies in its ability to integrate traditional banking services with modern technology, making financial transactions more accessible and efficient. This integration includes features like spending in various currencies, cryptocurrency trading, and stock investments, all managed through a user-friendly mobile app. Revolut's success is marked by its rapid expansion, with services available in several countries and a large customer base. Its approach to modern banking, coupled with its commitment to simplifying complex financial services, has solidified its status as a key figure in the FinTech landscape​​​​. 6. Chipper Cash Location: Headquarters in San Francisco, CA, USA Year Founded: 2018 Funding Series/Amount: Raised a total of $152.2 million Prominent Investors: FTX, Jeff Bezos, Silicon Valley Bank, Joe Montana​​​​​​​​ Chipper Cash specializes in mobile cross-border money transfers in Africa. It has successfully developed a mobile app available on both iOS and Android platforms, catering to several African countries with peer-to-peer transfer capabilities. The company's approach to simplifying financial transactions across borders, particularly in regions with significant remittance flows, has positioned it as a notable entity in the FinTech landscape. The core business model of Chipper Cash is centered on offering free peer-to-peer financial transfer services, a strategy that has been crucial for customer acquisition. Leveraging this model, Chipper Cash has expanded its service offerings to include cryptocurrency trading, investment services, and business payment solutions. This diversification allows the company to upsell various financial products to its user base, effectively generating revenue through fees on stock and cryptocurrency transactions, interchange fees, and payment fees. Chipper Cash's innovative approach to eliminate high transaction fees traditionally associated with sending money, particularly in Africa, has enabled rapid user growth and expansion into multiple countries. Its business strategy mirrors that of other successful FinTech companies that started with low-cost cross-border payments and later expanded their revenue streams​​. 7. Gohenry Location: London, England Year Founded: 2012 Funding Series/Amount: Raised a total of $125 million Prominent Investors: Edison Partners, Revaia, Citi Ventures, Muse Capital, Nexi​​​​ Gohenry is focused on providing financial services for the younger generation, specifically targeting children aged 6 to 18 years. The company offers a unique combination of a prepaid debit card and a financial education app. This blend of services is designed to empower young people to learn about earning, saving, and responsible spending, effectively integrating financial literacy into their early learning. The business model of Gohenry revolves around providing an innovative family banking tool. This tool allows parents to set up regular pocket money transfers, make one-off payments, and monitor their children's spending habits. Additionally, the platform sets tasks for children, enabling them to earn money, thus instilling a sense of financial responsibility from a young age. Gohenry's approach to financial education and its dedication to serving a younger demographic make it a prominent figure in the FinTech landscape. Its acquisition by Acorns further underscores its significance in the sector, enhancing its potential to expand its offerings and reach a global audience. This strategic move positions Gohenry to continue shaping the future of financial education and management for the younger generation​​​​. 8. Creditas Location: São Paulo, Brazil Year Founded: 2012 Funding Series/Amount: Raised US$879 million through 6 financing rounds​​. Prominent Investors: Investors include, Softbank Latam fund, Amadeus Capital Partners, VEF, Kaszek Ventures, and Redpoint ventures​​. Creditas operates a digital lending platform, providing secure consumer loans and positioning itself as a leader in the secured lending market in Brazil and Mexico. The business model of Creditas is centered on offering a comprehensive suite of financial services. Their products range from home equity and auto equity loans to innovative consumer solutions like Creditas Store, which is the first e-commerce platform in Brazil that allows payment through salary deductions. This diversified approach extends to Creditas @work, offering payroll loans, salary advances, and benefits cards. Creditas' strategic expansion into Mexico marks its growth beyond Brazilian borders, signifying its impact and potential in the broader Latin American market. Creditas stands out in the FinTech landscape for its asset-light ecosystem that caters to various financial needs throughout a customer's lifetime. Their success is reflected in their ability to attract substantial investments and the backing of prominent investors. The company's agile adaptation to market needs and its digital-first approach have been crucial in reshaping the Brazilian financial system, particularly in terms of offering more efficient services and lower lending rates compared to traditional banking institutions​​. 9. Vivid Money Location: Based in Berlin, Germany. Year Founded: 2020. Funding Series/Amount: Vivid Money has raised a total of $200 million over several funding rounds. This includes a Series C round in February 2022, where they raised $114 million. Prominent Investors: Key investors include SoftBank in Series C and Ribbit Capital in Series A. Vivid Money is a rapidly growing FinTech startup. It offers a comprehensive financial platform, combining traditional banking services with innovative investment opportunities like stock and cryptocurrency investing. Known for its user-friendly "super app," Vivid caters to a new generation of consumers exploring decentralized finance. The app's free investing services, supplemented by revenue from exchange rates and other fees, along with a premium subscription model, underline its unique approach in the FinTech sector. This blend of accessible financial services and investment options positions Vivid Money as a notable player in the European FinTech landscape. 10. Rapyd Location: Israel. Year Founded: 2015. Funding Series/Amount: As of their last funding round, Rapyd raised $300 million in a Series E round, contributing to a total of $960 million raised to date. Prominent Investors: Investors include BlackRock, Fidelity, General Catalyst, Target Global, and Spark Capital. Rapyd operates as a global payment services provider, offering a platform that facilitates the transfer of electronic funds across borders through various payment methods like bank transfers, digital wallets, and cash. This startup distinguishes itself in the FinTech landscape by its comprehensive approach to international payments and acquisitions, mainly focusing on European and Asian markets. Rapyd's rapid growth, demonstrated by a surge in valuation to $15 billion, reflects its successful strategy of acquisitions and expanding payment solutions. These achievements have positioned Rapyd as Israel's highest-valued private tech and FinTech company, underscoring its impact in the evolving digital payment sector. 11. Sunbit Location: Los Angeles, California. Year Founded: 2016. Funding Series/Amount: Achieved unicorn status with a Series D funding round of $130 million, leading to a valuation of $1.1 billion. Prominent Investors: Group 11, Zeev Ventures, Migdal Insurance, Harel Group, AltaIR Capital, More Investment House. Sunbit is renowned for its Buy Now, Pay Later (BNPL) technology, catering to everyday needs and services. Their innovative approach has led to high approval rates, supporting a wide range of transaction amounts. Sunbit's technology is utilized in over 7,300 locations, including auto dealership service centers and various retailers. This rapid expansion and unique financing solutions underline Sunbit's significant role in the evolving FinTech landscape. 12. Cash App Location: San Francisco, California. Year Founded: 2013 (as Square Cash). Funding Series/Amount: Being a service of Square, Inc., Cash App's funding is part of Square's broader financial activities. Prominent Investors: As a part of Square, Inc., Cash App benefits from the investors in Square, including notable names such as Sequoia Capital, Goldman Sachs, and JP Morgan. Cash App is a mobile payment service that allows users to transfer money to one another using a mobile app. The service is part of Square, Inc., a larger financial and merchant services aggregator. Cash App's standout features include the ability to buy and sell Bitcoin and the unique "Cash Card" – a customizable debit card linked to the user's Cash App balance. Its simple interface, along with versatile functionality, has made it popular among a younger demographic. Cash App's growth is reflective of the broader trend towards digital banking solutions and fintech innovation, positioning it as a major player in the mobile payments space. 13. Brex Location: San Francisco, California. Year Founded: 2017. Funding Series/Amount: The company has undergone several funding rounds, notably raising $425 million in a Series D round in April 2021. Prominent Investors: Investors in Brex include DST Global, Ribbit Capital, Y Combinator, Kleiner Perkins, Lone Pine Capital, Max Levchin, and Peter Thiel. Brex started as a VR company before pivoting to FinTech during their participation in Y Combinator's accelerator program. The company provides financial services tailored to businesses, offering products like corporate credit cards, cash management accounts, and expense management tools. Targeting initially early-stage technology startups for quick access to capital, Brex has since expanded its services to include life science, late-stage, e-commerce, and enterprise companies. Brex stands out in the FinTech landscape for its innovative approach to business credit and financial management. The company's credit cards are designed with startup needs in mind, featuring high credit limits based on a company's cash balance and financial backing. This focus on serving the unique needs of startups and growing businesses, combined with their substantial funding and rapid expansion, positions Brex as a key player in the evolving world of business finance. 14. CapWay Location: Atlanta, Georgia. Year Founded: 2017. Funding Series/Amount: Not specified. CapWay focuses on creating financial access and opportunities for underserved communities. It offers an ecosystem that includes digital banking tools, savings tools, and financial content, catering to both individual consumers and businesses. The company addresses the needs of the cashless economy and those looking for alternatives to traditional financial systems. CapWay's emphasis on financial inclusion for overlooked demographics sets it apart in the FinTech sector. Connect with FinTech investors with Visible The FinTech sector is brimming with innovation, driven by startups like Chime, Stripe, and Plaid. These companies are not only transforming financial transactions but are also setting new benchmarks in customer experience and financial accessibility. For founders looking to connect with investors who share a vision for financial innovation, check out our Connect investor database with filtered FinTech investors. If you are a Fintech investor create a profile here on our Connect investor database. Use Visible to manage every part of your fundraising funnel with investor updates, fundraising pipelines, pitch deck sharing, and data rooms. Raise capital, update investors, and engage your team from a single platform. Try Visible free for 14 days. Related Resource: 10+ Founder Friendly Venture Capital Firms Investing in Startups Related Resource: 20+ VCs Investing in E-commerce and Consumer Products

"The most successful fund managers are going to be the ones who are really authentic to what is important to them and they make sure every attribute of their model reflects that authenticity." - Gale Wilkinson About the Webinar Markdowns and lack of LP distributions resulted in a challenging fundraising year for many VCs. The firms that did close new funds in 2023 had to put in extra work to stand out and foster confidence from new investors. Visible had the pleasure of hosting Gale Wilkinson from VITALIZE Venture Capital on Tuesday, January 30th to discuss what she learned while closing her second fund in Q4 of 2023. You can view the webinar recording below. Webinar topics This webinar was designed for people working in Venture Capital who want to learn more about the VC fundraising process. Webinar topics included: Overview of VITALIZE's fundraising process Pre-fundraising activities that made a difference How LP diligence differed between Fund I and Fund II How Gale leverages social media to build both her personal and professional brand Reviewing VITALIZE's fundraising pitch deck Advice for GP's raising in 2024 You can view the presentation deck here. Key Takeaways Expect raising your first and second fund to take 2-3 years Stay authentic to what's most important to you as a fund manager and what you're great at. Make sure every attribute of that model reflects your authenticity. Most GP decks are too long. Gale's advice --> Find out what about your story is most interesting and give enough information to make it extremely clear about who you are and what you do without going into confidential information.

As Matt Blumberg, CEO of Bolster, put it, “Leading a world-class board is one of the single most important things startup CEOs can do to help their businesses thrive and become industry leaders.” A crucial part of managing a board is the recurring board meeting. Many aspects impact a meeting but a well-crafted board deck can help strengthen a board meeting and empower the board and leadership team to make better decisions. Related Resource: How to Create a Board Deck (with Template) Learn more about crafting a SaaS board deck for your next board meeting below: The Power of a Well-Crafted SaaS Board Deck A well-crafted board deck can elevate a board meeting from good to great. A board is a valuable resource for founders and should be supported by founders as such. By properly preparing for a board meeting, founders and board members can leave the meeting with clear next steps, an understanding of impending challenges, and objectives for the board and team. Key Components of a SaaS Board Deck Every business and board is different. Different board members will likely want to see different discussion items and formats. Founders need to work with their board to find a format that works best for their team. Related Resource: Tips for Creating an Investor Pitch Deck However, there are some typical components that most founders and board members can expect to hit on in a SaaS board deck: 1. Executive Summary (CEO Update) Most board members will want to see an executive summary or CEO update. This can be a simple breakdown of highlights, lowlights, areas of focus, and any major news on your mind. This sets the tone for the meeting. When sharing lowlights, we recommend tying them into later discussions and working sessions. Pro tip: Take a look back at your investor updates from the month or quarter to help take a look back on the period. Related Resource: How to Get the Most Out of Your Next Board Meeting 2. Department Updates Next, we recommend spending a few minutes on department updates. This can be any major changes to hiring and headcount, open job positions you are actively looking to fill, and any highlights or changes related to company culture. 3. Product Roadmap Developing products is crucial for SaaS companies. Most board members will want insight into your product roadmap and how you are approaching monetization. This can include a recent product that was released with early usage data and a vision of where your product is headed over the next quarter. Board members might not be pros in your product/market so keep things high level and don’t spend too much time getting into the weeds — unless you have board members that will be able to offer insight into the market or product. 4. KPIs and Metrics Overview Board members will also want a look into KPIs and metrics. These should be metrics that stay consistent from meeting to meeting and are something that board members are familiar with. Similar to sharing a product roadmap, you’ll want to ensure you are not sharing too granular of data that can lead to confusion and loss of focus on the main objectives of the meeting. Pro tip: If you are regularly tracking your key metrics with a dashboarding tool it should be easy to pull data and metrics to prepare your board deck. 5. Financials and Projections The financial health of your business is crucial to board members. They will want a thorough understanding of your cash position and the financial health of your business. If you are consistently sharing updates with your investors and board members, there should be no surprises here. Board members will also want to look into your projections and understand how you are thinking about growth. 6. Working Sessions Lastly, board members can offer strategic help and advice when it comes to different aspects of your business. You can leverage working sessions to tap into their experience, network, and knowledge to help address potential challenges and risks that your business faces. Best Practices for Crafting a SaaS Board Deck Founders are busy. On top of the day-to-day duties of building a business, building a board deck can fall by the wayside. However, there are a few tips that founders can use to concisely craft a board deck. Check out a few best practices and tips below: Keep It Concise Yet Comprehensive As we alluded to above, you will want to find the balance of giving enough detail while keeping things clear and concise. Board members typically spend time with other companies and their careers so they will not understand your business at the same level that you do. However, you want to strap them with the information and data they need to help them succeed as a board member. Incorporate Data Visualization Wherever Possible Board meetings are full of a lot of information and data. Making the data and information as digestible and clear as possible to crucial to a strong meeting. We recommend leveraging data visualizations when possible. However, some visualizations can be confusing and lead to further questions. Keep your visualizations clear and simple. Storytelling Is Key Finding a flow and rhythm to your board meeting can be done with strong storytelling. Strong storytellers can tie in their data, challenges, customer stories, etc. to help board members stay engaged and get a good understand of the state of your business. Design and Aesthetics While the content of the board deck is what matters most a well-designed board deck certainly does not hurt. Finding the balance between a well-designed board deck and time is tricky. You will want to present your board deck in a polished and professional manner but do not want to take time away from critical business operations. At the end of the day, you want to make sure that your board deck portrays crucial information in an easy-to-interpret way. Start Your Funding Journey with Visible Running a successful board meeting can be a high-leverage activity for your startup. The easiest thing you can do is come prepared and ready to have a strategic conversation with the people who matter most to your business. Let us help prepare for your next board meeting or fundraising event. Raise capital, update investors, and engage your team from a single platform. Try Visible free for 14 days.

Contributed equity is a cornerstone in the world of startups, serving as a vital mechanism for securing funding and fostering growth. This concept, crucial for founders and investors alike, involves the acquisition of a company's stock in exchange for capital, be it cash or other assets. Its significance lies not only in providing essential funds for a growing business but also in establishing a foundation for stakeholder relationships and future financial strategies. As we delve into the nuances of contributed equity, we aim to equip startup founders with the knowledge necessary to navigate this critical aspect of business growth effectively. What is Contributed Equity? Contributed equity represents the funds that investors infuse into a startup in exchange for ownership shares. This form of equity is distinct from other types, such as earned equity, which is typically accumulated through company profits or sweat equity. Contributed equity materializes when investors, whether angel investors, venture capitalists, or even friends and family, provide cash or other assets to a startup. In return, they receive shares, reflecting their ownership and stake in the company's future. Related resource: What is a Cap Table & Why is it Important for Your Startup Formula for Contributed Equity The formula for calculating contributed capital, also known as contributed equity, can be understood through two different approaches, depending on the financial information available and the context in which it is being calculated. Common Stock and Additional Paid-in Capital Approach: This method involves combining the value of common stock with the additional paid-in capital (APIC). Common stock is the par value of the shares issued by the company, while APIC represents the excess amount investors pay over the par value. The formula is: Contributed Capital = Common Stock + Additional Paid-in Capital For example, if a company issues shares at a par value and investors pay more than this amount, the extra paid is recorded as APIC. The sum of these two gives the total contributed capital. Total Equity and Retained Earnings Approach: Another way to calculate contributed capital is by subtracting retained earnings from the total equity of a company. The formula is: Contributed Capital (CC) = Total Equity (TE) − Retained Earnings (RE) This method is particularly useful when looking at the company's overall equity structure and understanding how much of the equity is contributed by shareholders as opposed to being generated by the company's operations. Both methods provide valuable insights into the financial contributions made by shareholders to a company's equity. The choice of method largely depends on the specific financial data available and the aspect of contributed capital that needs to be analyzed. Contributed Equity Example An example of contributed equity can be illustrated through the following scenario: Suppose a company, let's call it ABC Corp, decides to issue new shares to raise capital. ABC Corp issues 10,000 shares with a par value of $1 per share. However, investors are willing to pay $10 per share, valuing the entire issue at $100,000. In this scenario, ABC Corp will record $10,000 in its common stock account (reflecting the par value of the shares) and $90,000 in its Additional Paid-in Capital account (representing the excess over the par value). The total contributed equity, in this case, would be $100,000, which is the sum of the amounts in the common stock and Additional Paid-in Capital accounts. This example demonstrates how contributed equity is raised through the issuance of shares and how it is recorded on the company's balance sheet​​. In another illustrative example, XYZ Inc. decides to raise capital through the issuance of common and preferred stock. XYZ Inc. issues one million shares of common stock at $20 per share, resulting in $20 million being added to the company's contributed capital. In addition, the company issues 500,000 shares of preferred stock at $25 per share, amounting to $12.5 million. The total contributed capital raised from these issuances is $32.5 million. This capital is used for various company purposes like launching new products or expanding business operations. Common stockholders gain voting rights and the potential for capital appreciation, while preferred stockholders enjoy fixed dividends and priority in receiving returns​​. These examples illustrate how contributed equity is generated through the issuance of shares and how it impacts a company's financial structure. Contributed Equity Vs. Earned Equity Contributed equity and earned equity are two distinct types of equity that represent different sources of capital in a company. Contributed Equity: This is also known as paid-in capital. It refers to the capital that investors contribute to a company in exchange for shares. This type of equity can include funds raised from initial public offerings (IPOs), secondary offerings, direct listings, and the issuance of preferred shares. It also encompasses assets or reductions in liability exchanged for shares. Contributed equity is calculated as the sum of the par value of shares purchased by investors and any additional amount paid over this par value, known as additional paid-in capital​​. Earned Equity: Also known as retained earnings, this represents the portion of a company's net income that is retained rather than distributed as dividends. Earned equity accumulates over time and increases if the company retains some or all of its net income. Conversely, it decreases if the company distributes more in dividends than its net income or incurs losses. For new or low-growth companies that typically don't distribute dividends, earned capital can increase if the company is profitable​​. In summary, contributed equity reflects the investment made by owners and investors in the company, while earned equity indicates the company's profitability and the amount of profit retained in the business. Both types of equity contribute to the overall shareholder’s equity of a company​​. Types of Contributed Equity Transitioning to the various forms of contributed equity, it's important to understand the spectrum ranging from common stock to more complex instruments like warrants. Common Stock Common stock is a key component of contributed equity in a corporation, representing ownership and providing various rights to shareholders. Key features include: Voting Rights: Shareholders of common stock can vote on significant corporate decisions, such as electing the board of directors and approving corporate policies. Dividends: While not guaranteed, common stockholders may receive dividends based on the company's profitability, as decided by the board of directors. Capital Appreciation: Investors in common stock can benefit from the potential increase in stock value as the company grows. Residual Claim: In case of liquidation, common stockholders have claims to the company's assets after debts and preferred stock claims are settled. Risks: Common stock investment involves risks such as market volatility and potential loss in case of company bankruptcy. On the balance sheet, common stock is part of stockholders' equity and may include a par value, reflecting a nominal value assigned to the stock. The balance sheet also distinguishes between issued and outstanding shares, with the difference indicating treasury stock - shares reacquired but not retired by the corporation. Preferred Stock Preferred stock is a unique type of equity that combines elements of both stocks and bonds, offering benefits such as fixed dividend rates and greater claims on assets in liquidation compared to common stock. Unlike common stockholders, preferred shareholders typically don't have voting rights. The dividends of preferred stock are usually higher and prioritized over common stock dividends, providing more predictability for investors. Preferred shares are less volatile than common stocks but don't offer the same potential for capital appreciation. There are various types of preferred stock, including convertible, callable, cumulative, and participatory, each offering different benefits. Preferred stock is an appealing option for investors seeking stable dividend income but it lacks the growth potential of common stocks and the voting rights associated with them​​. Additional paid-in capital (APIC) Additional Paid-In Capital (APIC) is a crucial element in a company's financial structure, particularly in the shareholders' equity section of the balance sheet. APIC represents the amount investors pay over and above the par value of a company’s shares when they purchase them. This difference between the issue price and the par value, multiplied by the number of shares issued, constitutes the APIC. The significance of APIC in a company's financial structure is multifaceted: No Interest or Repayment Obligations: Unlike raising capital through loans or bonds, APIC does not require the company to pay interest or repay the principal amount. It is a more flexible and cost-effective way for companies to raise capital, especially for those not in a position to incur additional debt. Non-Dilution of Control: By raising capital through APIC, companies can avoid diluting the control of existing shareholders. This method involves issuing new shares to investors, but it does not necessarily affect the ownership stake or control of existing shareholders. Improved Financial Ratios: APIC can enhance a company's financial ratios, making it more attractive to future investors or lenders. A higher APIC relative to total equity can indicate financial stability and security. Increased Liquidity: APIC can enhance the liquidity of a company's shares, making them more appealing to investors. This is particularly significant for companies planning to go public or attract institutional investors. Facilitates Growth and Expansion: APIC provides companies with essential funds to explore new markets, invest in research and development, or acquire other companies. This access to capital is crucial for supporting growth and innovation. However, there are potential downsides to relying heavily on APIC. It can lead to the dilution of earnings per share and reduce earnings available to existing shareholders. In the event of a decline in the company’s share price post-APIC offering, there can be pressure from investors to enhance financial performance. Restricted Stock Units (RSUs) Restricted Stock Units (RSUs) are a form of stock-based compensation used to align employee incentives with shareholder interests. RSUs grant employees the right to receive a predetermined number of shares of the employer's stock, contingent upon meeting specific vesting requirements. These requirements can be time-based, performance-based, or event-based. Unlike stock options, RSUs don't provide the option to buy stock shares but instead promise actual shares or equivalent compensation once vested. The key differences between RSUs and direct stock grants are: Vesting Schedule: RSUs have a vesting schedule that dictates when the employee will receive the shares. This can be based on time with the company, performance metrics, or specific events like an IPO. The shares are not immediately available to the employee upon granting; they must meet the vesting criteria first. Taxation: RSUs are generally taxed as ordinary income when they vest, meaning the full value of the vested units is subject to tax at that time. In contrast, employee stock options have different tax treatments, depending on whether they are Non-Qualified Stock Options (NQSOs) or Incentive Stock Options (ISOs). Employee Incentives: RSUs provide a clear incentive for employees as they know the value of their grant and when they'll receive the shares. This clarity can be motivational, encouraging employees to contribute to the company's success over time to increase the value of their shares. Flexibility and Complexity: RSUs are generally more straightforward than stock options, which involve exercise prices and expiration dates. RSUs offer less flexibility but are easier for employees to understand in terms of value. The impact of RSUs on employee incentives is significant. They offer a stake in the company's future, potentially leading to substantial financial gain if the company performs well. This aligns the interests of the employees with those of the company and its shareholders, potentially driving better performance and retention. Stock Options Stock options, as a type of contributed equity, are an important tool used by companies to attract, motivate, and retain employees. They function by granting employees the right, but not the obligation, to purchase a specific number of company shares at a predetermined price (known as the exercise or strike price) within a set time frame. How Stock Options Work Granting of Options: Employees are granted stock options at a specific strike price, often the stock's market value on the grant date. Vesting Period: There is usually a vesting period during which the employee must remain with the company to be eligible to exercise the options. Exercising Options: After the vesting period, employees can exercise their options to purchase stock at the strike price. Potential Financial Gain: If the company's stock price increases above the strike price, employees can buy the stock at a lower price, potentially realizing a gain if they sell the shares at a higher market value. Benefits to Employees Financial Upside without Upfront Cost: Employees can benefit from the company's growth without needing to invest their own money upfront. Flexibility: They have the flexibility to exercise their options at potentially favorable times within the exercise period. Alignment with Company Success: Stock options align employees’ interests with those of the company and its shareholders, incentivizing performance and retention. Dilutive Effect on Shareholder Value Increased Share Count: When employees exercise stock options, new shares are created, increasing the total number of shares outstanding. Earnings Per Share Impact: This dilution can lower earnings per share (EPS), as the same amount of earnings is spread over a larger number of shares. Potential Impact on Stock Price: While dilution can have a negative impact on EPS and possibly the stock price, the extent of this effect depends on the number of options exercised and the company’s overall performance. Considerations for Companies Companies need to carefully manage the granting of stock options to balance the benefits of incentivizing employees and the potential dilution of existing shareholders' equity. Companies must communicate transparently with shareholders about the potential impact of stock options on dilution and earnings metrics. Warrants Warrants are a type of financial instrument that grants the holder the right, but not the obligation, to buy or sell an underlying asset, such as stocks, at a predetermined price before a specific expiration date. They are unique in their structure and offer several distinct features: Types of Warrants: There are primarily two types of warrants - call warrants and put warrants. Call warrants give the right to buy the underlying asset, while put warrants provide the right to sell it. Leverage: Warrants offer leverage, meaning a relatively small initial investment can give exposure to a larger amount of the underlying asset. This can amplify potential returns but also increase risk. Strike Price and Expiration Date: The strike price is the predetermined price at which the warrant holder can buy (call) or sell (put) the underlying asset. Warrants have a specific expiration date, after which they become worthless. The value of a warrant is influenced by the proximity of the underlying asset's price to the strike price and the time remaining until expiration. Risks and Volatility: Warrants are considered high-risk investments due to their derivative nature and sensitivity to market fluctuations. The value of warrants can change significantly with market conditions. Investment Strategies: Warrants can be used in various investment strategies, including speculation on the price movement of the underlying asset, hedging against portfolio risks, and leveraging to increase exposure. Trading and Liquidity: Warrants are traded on specific stock exchanges or financial markets, providing liquidity to investors. The market for warrants can vary, with some being more liquid than others. No Voting Rights or Shareholder Privileges: Unlike direct stock ownership, holding warrants does not confer voting rights or other shareholder privileges in the issuing company. The Role of Contributed Equity in Startup Financing Contributed equity plays a foundational role in startup financing, often serving as the initial capital that helps get a business off the ground. This form of equity involves funds raised through the issuance of shares to investors, typically without immediate repayment obligations, thus providing essential funding for early-stage companies. Comparing contributed equity with other financing options like venture capital, loans, and angel investing reveals distinct advantages and considerations for startups: Venture Capital (VC): VCs typically invest in early-stage companies, often after some proof of concept or customer base development. The investment size can range from a few million to tens of millions. VC firms often provide not just capital but also mentorship and network access. However, they usually acquire a substantial stake in the company, which can lead to significant dilution of the founders' shares. Angel Investors and Seed Funding: These investors are often the first external financiers in a startup, sometimes coming in even before the business generates revenue. Investments from angel investors or through seed funding are generally lower compared to VC, ranging from tens of thousands to a few million dollars. They typically take on higher risk for potentially higher returns and may offer valuable guidance and industry connections. Loans: Startup business loans are a debt financing option where repayment with interest is required. Unlike equity financing, loans do not result in ownership dilution. Banks may offer various products like venture debt or overdraft facilities, depending on the startup’s maturity and revenue. Loans, however, might not be as readily accessible to startups without significant assets or steady revenue streams. The choice among these options depends on the startup's stage, funding requirements, and long-term goals. Contributed equity is particularly advantageous for early-stage funding as it does not burden the company with debt repayments, allowing more flexibility for growth and innovation. This form of financing aligns investors' and founders' interests, as both parties stand to benefit from the company's success. However, it can lead to a dilution of ownership for the founders. Related resources: Corporate Venture Capital: A Strategic Partnership & Differences to Traditional VC Seed Funding for Startups 101: A Complete Guide Empower Your Startup Growth with Visible Contributed equity is an indispensable tool for startup growth, offering a flexible and strategic financing option. Founders can harness this power to build robust, investor-aligned companies. For those seeking to streamline their investor relations and reporting, Visible offers an intuitive platform to enhance transparency and foster investor confidence. Ready to empower your startup's journey? Try Visible for free for 14 days and elevate your investor engagement to the next level!

In recent years, the world of Non-Fungible Tokens (NFTs) has exploded in popularity, with various use cases and projects emerging across the digital landscape. As a result, venture capitalists (VCs) and NFT investors have started actively staking their capital in NFT projects and use cases. This trend represents a significant shift in the investment landscape, with traditional investors recognizing the potential of NFTs to revolutionize various industries and create new revenue streams. From gaming and art to real estate and collectibles, NFTs offer a unique opportunity for investors to get involved in a rapidly growing market and support innovative projects with the potential for massive returns. Also check out, 10 VC Firms Investing in Web3 Companies. NFT 101: Understanding the Basics NFTs are tokens that we can use to represent ownership of unique items. They let us tokenize things like art, collectibles, even real estate. They can only have one official owner at a time and they’re secured by the Ethereum blockchain – no one can modify the record of ownership or copy/paste a new NFT into existence. – ethereum.org NFTs are unique digital tokens that represent one-of-a-kind assets that cannot be replicated, making them valuable as digital collectibles. Though they are held in a crypto wallet and function as a type of cryptocurrency, they cannot be used to purchase goods or services. Rather, their value is derived from their uniqueness and the potential to increase in value over time. This has made NFTs an attractive investment opportunity for venture capitalists, who recognize their potential to revolutionize various industries and create new revenue streams. Examples of NFTs include digital art pieces, memes, gifs, music albums, videos, virtual real estate, and even tweets. Upon purchase, the ownership of an NFT is guaranteed through a digital signature, creating a secure and transparent investment opportunity for those looking to support innovative projects with the potential for significant returns. While NFTs may seem like digital paperwork at their core, they represent a promising future in the world of digital assets and have already captured the attention of traditional investors. Where Is the Value of an NFT Derived From? Venture capitalists are investing in NFTs for several reasons, including the potential for significant returns, the growing popularity of NFTs, and the promise of innovative use cases for the technology. Unlike traditional collectibles, the value of NFTs is derived from their one-of-a-kind nature, which is stored on the Ethereum blockchain. This allows for secure ownership verification and differentiates NFTs from standard cryptocurrency tokens like ETH. This ownership verification is crucial as it provides evidence of the rarity and scarcity of an item, giving it value in the eyes of collectors. This can range from digital art, to music, to even tweets or other unique content. With blockchain technology providing ownership verification, the value of NFTs is no longer solely dependent on the market but also on their rarity and provenance. Additionally, NFTs are enabling the possibility of shared ownership, which allows for communities of fans to own a piece of the creator’s work and incentivizes their success. As a result, venture capitalists see NFTs as a promising investment opportunity that could potentially change the way creators monetize and distribute their content, while also creating new revenue streams for investors. Also check out, Top VCs Investing in the $100 Billion Creator Economy. NFTs are gaining popularity as a way for creators to monetize their digital content and intellectual property. As more artists, musicians, and other creators adopt NFTs, the market is expected to grow, presenting new opportunities for investors. Furthermore, NFTs have the potential to revolutionize various industries by enabling secure ownership and authentication of digital assets. For example, NFTs can be used in gaming, virtual real estate, and even in the art world to prove provenance and authenticity. Another reason VCs are interested in NFTs is that they represent a new and exciting asset class, with the potential for high growth and significant returns. As such, venture capitalists are investing in NFT marketplaces, NFT-focused companies, and NFT collections. Venture capitalists are investing in NFTs in a variety of ways, including through direct investments in NFT projects and platforms, as well as by investing in companies that use NFTs as part of their business model. Many VCs are investing in NFT marketplaces that allow creators to sell their NFTs, such as OpenSea, Nifty Gateway, and SuperRare. They may also invest in NFT-focused companies that are creating new use cases for the technology, such as digital identity verification or supply chain management. Overall, venture capitalists are investing in NFTs as a way to tap into the growing popularity of the technology and to support innovative projects that have the potential for significant returns. As the market for NFTs continues to grow, it is likely that venture capitalists will continue to play a major role in shaping the future of the industry. Proven NFT Use Case Examples Pier Kicks predicts we are on our way to the “Metaverse” — a “self-sovereign financial system, an open creator economy, and a universal digital representation and ownership layer via NFTs (non-fungible tokens).” NFTs made their debut focusing mainly on art, music, and trading cards because it was the most widely adopted collectible investment items with an existing community of fans to tap into- giving them instant value. This was the start though and the beauty of NFTs is that this traditional concept can now be expanded upon in so many ways. Also check out, The Top VCs Investing in Community Driven Companies. Now fast-forward 2 years later and according to our favorite crypto newsletter, The Milk Road, it looks like the NFT use cases that are here to stay are: Rewards for Super Fans A status symbol – there is actual proof that fans made the discovery early. A membership card – a way for NFT holders to get access to exclusive perks. A way for fans to “invest in your success”- if a fan buys someone’s NFT early it can be an investment and a way to fund the project/ artist/ person. Digital Collectables Art- before NFTs art wasn’t able to be digitally collected, which is why this was probably the first and best use case so far. Branded collectibles- we’re now seeing the high fashion world take part in the craze as well and eventually in the metaverse people will be able to show off these digital assets on their avatars. Membership as an Asset “NFTs turn ‘memberships’ into tradeable assets. NFTs let you ‘invest’ in a social group, rather than just paying fees for access.” Making things like a SoHo House membership digitally transferrable. Video Game Assets “In the future, games will issue items as NFTs. Those are things you OWN. You can sell them. You can bring them into new games. You can rent them out to other players.” NFTs In the Future of Investing As the use cases for NFTs continue to expand, venture capital (VC) firms are taking notice and are increasingly interested in investing in startups and businesses that are utilizing NFTs in innovative and impactful ways. One area where VC firms are likely to invest in NFTs is in the real estate industry. As mentioned, tokenizing real-world assets is still in its early days, but once certain securities, insurance, and infrastructures are built out, the use cases could be endless. We can expect to see VC firms investing in startups that are developing blockchain-based platforms that allow for the tokenization of real estate assets, making it easier for individuals and institutions to buy and sell fractional ownership in property. VC firms are also likely to invest in startups that are utilizing NFTs in the realm of official documentation. The ability to create, transfer, and verify ownership of digital assets using NFTs has the potential to revolutionize the way that official documents are handled. For example, NFTs could be used to store and verify educational degrees, professional licenses, and other certifications. We can expect VC firms to invest in startups that are building the necessary infrastructure and platforms to enable the tokenization and verification of these types of official documents. In addition to real estate and official documentation, VC firms are likely to invest in startups that are utilizing NFTs in the sports and entertainment industries. NFTs provide a new way for fans to connect with their favorite teams, artists, and celebrities. For example, NFTs could be used to create limited-edition merchandise, exclusive content, or even fan experiences. We can expect VC firms to invest in startups that are building platforms and marketplaces that enable these types of fan experiences. Overall, as the use cases for NFTs continue to expand, we can expect to see increased interest and investment from VC firms. This investment will help to drive innovation in the space and create new opportunities for startups and businesses that are utilizing NFTs in creative and impactful ways. As a side note, for any companies looking to drop NFTs to your customers or fans, thirdweb is a platform worth exploring. Resources for Founders CoinDesk: CoinDesk is a leading media outlet covering the cryptocurrency and blockchain industry. They have a dedicated section on their website for NFT news and analysis, providing updates on the latest developments in the space. CryptoSlate: CryptoSlate is a popular cryptocurrency news and media outlet that covers NFTs and their various use cases. They have a section dedicated to NFT news and analysis, providing insights on the latest trends and developments in the industry. Crunchbase: Crunchbase is a leading platform for discovering and tracking innovative companies and investors. They have a dedicated section on their website for NFT-related companies, providing information on the top investors in the space and their investment history. NFT Accelerator: NFT Accelerator is a program that provides funding, mentorship, and resources to startups that are building NFT-based businesses. They focus on helping founders navigate the challenges of building businesses in the rapidly-evolving NFT ecosystem. OpenSea: A popular NFT marketplace that allows creators to sell and trade their NFTs. Founders can use OpenSea to sell their own NFTs and learn more about the market. SuperRare: Another NFT marketplace that focuses on digital art. SuperRare has a curated selection of high-quality NFTs and offers a unique auction system that founders may find helpful. Nifty Gateway: A user-friendly NFT marketplace that specializes in drops, where a limited number of NFTs are released at a specific time. Nifty Gateway is owned by Gemini, a cryptocurrency exchange, and has attracted high-profile creators and investors. The Block: A news and research site that covers the blockchain and cryptocurrency industry, including NFTs. Founders can use The Block to stay up to date on the latest trends and developments in the NFT space. NFT Vision Hack: A hackathon and accelerator program for NFT-focused startups. Founders can apply for the program to receive funding and support from industry experts. Metapurse: A crypto-based investment fund that focuses on NFTs and virtual real estate. Founders can learn more about NFT investing and get in touch with Metapurse for potential investment opportunities. NFT School: An educational platform that provides resources and tutorials on NFTs and blockchain technology. Founders can use NFT School to learn more about the technical and practical aspects of creating and selling NFTs. NonFungible.com: A data analytics platform that tracks the NFT market, including sales data, price trends, and project rankings. Founders can use NonFungible.com to get a better understanding of the market and the performance of their own NFT projects. Top VCs and NFT Investors Actively Investing in NFT Projects With the increasing popularity and potential of NFTs, many venture capital firms and angel investors are diving into this new field of digital ownership. These investors are actively seeking out promising NFT startups and providing the necessary funding to turn these ideas into reality. In this next section, we will highlight some of the top NFT investors who are leading the way in this emerging industry. From Silicon Valley giants to influential individual investors, these are the players shaping the future of NFTs. Animoca Brands About: Animoca Brands is a global leader in gamification and blockchain with a large portfolio of over 380 investments, and with the mission to advance digital property rights and contribute to building the open metaverse. The company and its various subsidiaries develop and publish blockchain games, traditional games, and other products, many of which are based on popular global brands including Disney, WWE, Power Rangers, MotoGP™, Formula E, and Snoop Dogg. Their mission is, “To deliver digital property rights to the world’s gamers and Internet users, thereby creating a new asset class, play-to-earn economies, and a more equitable digital framework contributing to the building of the open metaverse.” Investment Stages: Seed, Series A, Series B Recent Investments: MPCH Labs Thirdwave Revolving Games Shima Capital About: Shima Capital is an investment fund that focuses on supporting cutting-edge blockchain startups. “Our goal has always been to invest in strong founders across all crypto verticals, a goal we achieved throughout 2022. #1 in seed-focused gaming projects #5 in CeFi, DeFi, Infrastructure, & Web3 #3 in total projects invested (actual # is closer to ~120)” Investment Stages: PreSeed and Seed Recent Investments: Magna Thirdwave Sender NGC Ventures About: NGC Ventures is one of the largest institutional investors of blockchain and distributed ledger technologies, and has been a key contributor to a number of leading blockchain projects. We strategically leveraging and amplifying our portfolio to help create and enhance each one’s competitive advantages. Selectively partnering with leading investment professionals and technical developers in the world. Investment Stages: Seed, Series A Recent Investments: Chainsafe Kin Insurance Fan Controlled Football HG Ventures About: We partner with visionary entrepreneurs who are focused on bringing impactful R&D to market.At HG Ventures, we understand the dynamic landscape of your industry and bring our passion, expertise, and assets to support you as you execute your strategy for success. We invest in early stage to growth stage companies developing advanced materials and systems for transportation, infrastructure, environmental services and specialty chemicals. We provide resources spanning deep market insight, manufacturing and supply chain assistance, pilot testing of products, R&D expertise and equipment, introductions to our customers and service providers, and more. Traction metrics requirements: We will invest at the pre-revenue and pre-product stage, but we want to see the beginnings of a dedicated, full-time executive team. Investment Stages: Early to Growth Stage- Seed, Series A, Series B, Recent Investments: Circulor 6k Transcend Software Paradigm About: Paradigm primarily invests in crypto-assets and businesses from the earliest stages of idea formation through to maturity. Every once in a while, a new technology comes along that changes everything. The internet defined the past few decades of innovation. We believe crypto will define the next few decades. Paradigm is an investment firm focused on supporting the crypto/Web3 companies and protocols of tomorrow. Our approach is flexible, long term, multi-stage, and global. We often get involved at the earliest stages of formation and continue supporting our portfolio companies over time.We take a deeply hands-on approach to help projects reach their full potential, from the technical (mechanism design, smart contract security, engineering) to the operational (recruiting, regulatory strategy). Thesis: Paradigm is an investment firm focused on supporting the great crypto/Web3 companies and protocols of tomorrow. Our approach is flexible, long term, multi-stage, and global. We often get involved at the earliest stages of formation and support our portfolio with additional capital over time. Investment Stages: Seed, Series A, Series B, Series C, Growth Recent Investments: Uniswap Labs Nxyz Exponential AU21 Capital About: AU21 Capital is a Venture Capital firm dedicated to procuring value for teams expanding the frontiers of blockchain technology. Our team brings decades of executive and operational experience at industry titans including Huobi and Galaxy Digital. Our business development and investment acumen shines through our portfolio companies, including partnerships with Astar, Axie Infinity, Injective, Marlin, Cere, Covalent, Casper labs, Serum, Fantom, Harmony, Iotex, Coin98, Polkadot, Star Atlas among many others. We also serve as trusted partners to sector-leading launchpads, and work routinely alongside top exchanges to bring products to market. Investment Stages: Seed, Series A Recent Investments: IQ Labs The Unfettered Cryption Network Awesome People Ventures About: Awesome People Ventures is an early-stage fund focused on Web3. We invest in the future of work and life. We support our founders with capital, hands-on growth support, and access to an exclusive talent network. Awesome People Ventures is backed by Marc Andreessen, Chris Dixon, Multicoin, and founders of top crypto projects. Awesome People Ventures invests in a diverse set of founders, who operate with integrity and are building long-standing companies. Investment Stages:Pre-Seed, Seed Recent Investments: Treeswift Solid World DAO Jia Exnetwork Capital About: Exnetwork Capital was founded in 2018 as a means to democratize access to opportunities to support blockchain projects. Since then, it has evolved to be a multi-faceted organization that supports not just the well-known configurations of blockchain organizations but radical ones such as anonymous and distributed teams. Investment Stages: Seed Recent Investments: Reign of Terror KlayCity Volare Finance ConsenSys Ventures About: ConsenSys Ventures is a venture capital arm ConsenSys, a blockchain venture production studio. Investment Stages: Accelerator, Pre-Seed, Seed, Series A Recent Investments: Kiln WalletConnect Sardine Looking for Funding? Visible Can Help- Start Your Next Round with Visible We believe great outcomes happen when founders forge relationships with investors and potential investors. We created our Connect Investor Database to help you in the first step of this journey. Instead of wasting time trying to figure out investor fit and profile for their given stage and industry, we created filters allowing you to find VC’s and accelerators who are looking to invest in companies like you. Check out all our investors here and filter as needed. After learning more about them with the profile information and resources given you can reach out to them with a tailored email. To help craft that first email check out 5 Strategies for Cold Emailing Potential Investors. After finding the right Investor you can create a personalized investor database with Visible. Combine qualified investors from Visible Connect with your own investor lists to share targeted Updates, decks, and dashboards. Start your free trial here.

Startup founders are pulled in a hundred different directions on any given day. On top of building a product, hiring a team, fundraising, selling, and more, founders are responsible for managing relationships with investors and board members. Why is a Board Deck Important? Oftentimes, preparing for a board meeting can get buried in the list of to-dos. However, when leveraged correctly, your board members and meetings can be a high-leverage activity for success. As Matt Blumberg, CEO of Bolster, puts it, “​​Leading a world-class board is one of the single most important things startup CEOs can do to help their businesses thrive and become industry leaders.” To help you prepare for your next board meeting, we’ve put together a list of resources and tips to help you build and share your board deck. Learn more below. Related Resource: Our Downloadable Board Deck Template What Should You Include in Your Board Deck? The goal of a board of directors can be boiled down to helping a company achieve its goals. While there are certainly more areas, a board, especially for startups, is fit to help in a few key areas: Hiring and recruiting employees Provide direction and strategy for the company Represent other investors and members of the business Build a governance system Maintain relationships with CEO and executives To make sure that you are getting the most out of your board of directors, coming to your board meetings prepared is vital. One of the key aspects to help you guide your meeting and highlight key talking points is having a well-thought-out board deck. Learn more about what should be included in your board deck below: 1) A High-Level Update From the Founder To kick off any board meeting or board deck, there should be a quick high-level overview from the founder and/or CEO. The purpose of this is to set the tone for what is to come and a general overview of how the past period (month, quarter, etc.) went for the business. Be sure to share any big wins from the previous period or quickly hit on things that might be negatively impacting you and your company. Think of this as the “big picture” for both the previous period and the company as a whole. Using the sections below, you can use the high-level update as a time to quickly hit on each of those to set expectations for what is to come throughout the meeting. Related Resource: Crafting the Perfect SaaS Board Deck: Templates, Guidelines, and Best Practices 2) A Section on KPIs and Metrics Next, dig into the KPIs and metrics from the previous period. The purpose of this is to give everyone the proper data and context they need to understand decisions that will be made later in the meeting. These metrics and KPIs should be agreed upon beforehand and everyone in the room should understand what they mean and how they impact the business. It is important to keep these metrics consistent from meeting to meeting. This helps everyone focus on what truly matters and will build trust with investors. It is worth noting that this could include qualitative metrics as well — customer stories or quotes are always great to share! 3) An Update on the Team and Organization as a Whole After digging into your KPIs and metrics, spend some time on your org chart and hiring plans. One of the places boards are best suited to help with is hiring and finding key talent so making sure you make the most of this section is vital. We recommend starting with a current org chart so investors and board members can understand where your headcount lies. From here, we recommend hitting on what teams need additional talent and walking through the roles you are hiring for. Be prescriptive as possible so they can reach out to their networks and find candidates for your company. 4) Product Development Update At this point, you’ve likely hit on the organization as a whole and how the business is performing as a whole. Next, you will want to dig into the product development and status of any new features or products you’ve released or been working on since your last meeting. This can be a time to provide additional metrics or share stories of how a new feature might be impacting your business. This can be used to further working/strategy sessions towards the end of the meeting. 5) An In-Depth Section on Organizational Strategy and Product Strategy Towards the end of your meeting is the true “meat and potatoes” of your meeting. This is a strategy or working session that should give you concrete steps and plans to take away from the meeting. It is generally recommended that this section should take 50%+ of your meeting time. This section can cover just about any issues you are facing as a founder (keeping in mind what your board members are best suited to help with). For example, if you are facing hiring challenges, highlight those and discuss what you want your org chart to look like. You can use it to plan a fundraising or financial event in the coming months. Or you can use this as a time to build a higher-level product roadmap. No matter what you use this for, make sure you have your talking points prepared so you can make the most of this section. 6) A Miscellaneous Chapter As always, save some time for miscellaneous or other topics. This can be official board business or governance. This might cover things like board resolutions, appointments, stock options, and more. Related Resource: What We’ve Learned From Investors About Running a Board Meeting Tips for Creating a Board Deck While there is no one-size-fits-all template to help you knock out your next board meeting deck, there are resources and best practices that you can use for your next meeting. Use a Template As we mentioned earlier, there are ~6 key areas you will likely want to hit on throughout a board meeting. Of course, the specifics and structure will vary from business to business. To help you select what is most important to your business, we’ve put together a board deck template. This template aims to help you structure the meeting and build your agenda. Give the board deck template a try here: Keep Slides Simple The goal of a board meeting is to prompt conversation. To do this, it is important to make sure your slides are simple and easily digestible. Make sure your slides are not full of unnecessary words and context. Use bullets and your narrative to help board members with any additional context they might need. Share Deck Materials Early To have the best conversation possible at your board meeting, you need to make sure everyone on your board is well prepared. To do so, make sure you are sending your board materials in advance so they can have an understanding of the past period and will be able to dig into tactical questions. As we wrote in our post, How to Get the Most Out of Your Next Board Meeting, “Most founders/CEO have found it best to send over their pre-meeting report/packet at least 4 days in advance.” Depending on your meeting cadence, you will want to send over things like your agenda, important matters, metrics, and more before your next board meeting to set the stage. Check out an example of what to send below: Related Resource: Pre-Board Meeting Update Template Use Visuals Ultimately the content of your deck is what matters most but having polished visuals certainly does not hurt. We suggest using concise and repeatable visuals in your board decks. For example, if you include a certain chart style/format, try to keep it consistent from deck to deck. There are also opportunities to improve your board with simple visuals and charts to help your board members visualize your company's status. Common Mistakes to Avoid When Creating a Board Deck Finding the right board deck format and style will likely take a few reps. As you sit through more board meetings, you should hear feedback and suggestions to help improve the actual format and content of your board decks. However, there are some common mistakes you can avoid from the get-go — check them out below: Not Having a Deep Understanding of Your Audience Board members want to see that you have an understanding of your audience — both themselves as stakeholders and your customers. Make sure that you are hyperfocused on your key stakeholders. This will help board members build conviction and trust in how you operate your business. Not Having a Clear Objective What do you want your board to accomplish after reading your deck? Do you want them to make a decision? Approve a new project? Provide feedback? Once you know your objective, you can structure your deck accordingly. Overloading the Deck With Information Your board deck should be concise and to the point. Avoid including too much information, as this can overwhelm your board and make it difficult for them to focus on the most important points. Too much information can also lead to questions and concerns about unrelated points/problems that you are trying to solve. Using Too Much Industry Jargon or Technical Language While your board should be familiar with your business, they are likely helping many other companies. To make sure everyone is on the same page, make sure to avoid technical language — it may seem obvious to see but is not always the case for someone not involved in the day-to-day. Start Your Funding Journey With Visible Running a successful board meeting can be a high-leverage activity for your startup. The easiest thing you can do is come prepared and ready to have a strategic conversation with the people who matter most to your business. Let us help prepare for your next board meeting or fundraising event. Raise capital, update investors and engage your team from a single platform. Try Visible free for 14 days.

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