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Fundraising is a Means
Fundraising for a startup takes enormous effort over a sustained period. Companies that raise rounds issue press releases after closing. One might mistakenly begin to think that fundraising is an end instead of a means to an end.
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Aligned on Success
Startup fundraising is a grueling process. By the time the deal closes, a startup leader often feels embattled and exhausted, wondering if taking on investment is possibly the worst thing ever. Yet there is light after closing.
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Understanding the Waterfall
In the most common upside scenario, when an investor-backed startup gets sold, the distribution of the sale proceeds is called the waterfall. Understanding how waterfalls work helps startup CEOs and investors grasp the implications of various fundraising terms.
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Wait to Spend Until the Money is in the Bank
When raising money or doing a big corporate deal, it pays to remember that the deal is not done until the money is in the bank.