Skill: 1kalin/afrexai-startup-fundraising (version 1.0.0)

--- name: Startup Fundraising Engine slug: afrexai-startup-fundraising version: 1.0.0 description: Complete startup fundraising system — from pre-seed to Series B. Investor targeting, pitch deck construction, term sheet negotiation, due diligence preparation, and cap table management. tags: fundraising, startup, venture-capital, pitch-deck, term-sheet, investors, seed, series-a --- # Startup Fundraising Engine ⚡ Complete fundraising operating system for founders raising pre-seed through Series B. Covers investor targeting, pitch construction, outreach, term sheet negotiation, due diligence preparation, and cap table management. **Zero dependencies. Pure methodology.** --- ## Phase 1: Fundraising Readiness Assessment ### 8-Signal Quick Health Check Score each 0-2 (0 = not ready, 1 = partially, 2 = ready): | Signal | Question | Score | |--------|----------|-------| | Traction | Do you have measurable growth metrics? | /2 | | Market | Can you articulate a $1B+ market bottoms-up? | /2 | | Team | Do you have a founding team that can execute? | /2 | | Product | Is there a working product or clear prototype? | /2 | | Story | Can you explain the opportunity in 60 seconds? | /2 | | Unit Economics | Do you know CAC, LTV, margins (or reasonable projections)? | /2 | | Use of Funds | Do you have a clear 18-month plan for the capital? | /2 | | Timing | Is now the right time to raise (runway, market, traction)? | /2 | **Score interpretation:** - 14-16: Ready to raise. Start immediately. - 10-13: Almost ready. Fix gaps in 2-4 weeks, then launch. - 6-9: Not ready. Build more traction first. Raising now will damage your reputation. - 0-5: Too early. Focus on product and initial customers. ### Fundraising Strategy Brief ```yaml fundraising_brief: company_name: "" stage: "" # pre-seed | seed | series-a | series-b current_arr_or_mrr: "" growth_rate_mom: "" # month-over-month team_size: 0 months_of_runway: 0 target_raise: "" # dollar amount target_valuation: "" # pre-money use_of_funds: engineering: "" # percentage + headcount sales_marketing: "" operations: "" runway_extension: "" timeline: start_date: "" target_close: "" # aim for 8-12 weeks key_metrics: customers: 0 revenue: "" growth_rate: "" retention: "" burn_rate: "" ``` ### Stage-Appropriate Raise Guide | Stage | Typical Raise | Pre-Money Valuation | What You Need | Investor Type | |-------|--------------|---------------------|---------------|---------------| | Pre-seed | $250K-$1M | $2M-$6M | Idea + team + early signal | Angels, pre-seed funds | | Seed | $1M-$4M | $6M-$15M | MVP + early traction + some revenue | Seed funds, angels | | Series A | $5M-$20M | $20M-$60M | PMF + $1M+ ARR + clear GTM | Series A VCs | | Series B | $15M-$50M | $60M-$200M | Scaling + $5M+ ARR + unit economics | Growth VCs | ### Raise-or-Don't Decision Framework **Raise NOW if:** - You have <6 months runway AND strong metrics - A clear use of funds would unlock 3-5x growth - Market timing is favorable (hot sector, strong VC appetite) - You have warm investor interest **DON'T raise if:** - You can bootstrap to profitability in 6-12 months - Metrics aren't strong enough (raising on weak numbers = bad terms) - You're raising because "everyone else is" (worst reason) - You haven't talked to 10+ potential investors informally first --- ## Phase 2: Investor Targeting & Pipeline ### Investor Selection Criteria Score each potential investor 1-5: | Dimension | Weight | What to Look For | |-----------|--------|-----------------| | Stage fit | 25% | Do they invest at your stage? Check recent deals, not website claims | | Sector fit | 25% | Have they invested in your space? Adjacent counts | | Check size | 15% | Does your raise match their typical check? | | Value-add | 15% | What beyond money? Intros, expertise, brand? | | Portfolio conflict | 10% | Any competitive portfolio companies? | | Reputation | 10% | Founder references? How do they behave in downturns? | ### Target List Architecture ```yaml investor_target: name: "" firm: "" title: "" email: "" linkedin: "" twitter: "" fit_score: 0 # 1-30 (sum of weighted dimensions) stage_focus: "" # pre-seed | seed | series-a | series-b | multi-stage sector_focus: [] # fintech, saas, health, etc. typical_check: "" # $500K-$2M recent_deals: [] # last 3-5 investments warm_path: "" # who can intro you? connection_strength: "" # strong | medium | weak | cold status: "" # researching | outreach | meeting | dd | term-sheet | pass | closed last_contact: "" next_action: "" notes: "" ``` ### Pipeline Sizing Rules | Round Size | Target Investors | Expected Meetings | Expected Term Sheets | |------------|-----------------|-------------------|---------------------| | Pre-seed ($500K) | 30-50 | 15-25 | 1-3 | | Seed ($2M) | 50-80 | 25-40 | 2-4 | | Series A ($10M) | 40-60 | 20-30 | 1-3 | | Series B ($25M) | 20-40 | 10-20 | 1-2 | **Conversion benchmarks:** - Cold outreach → meeting: 5-10% - Warm intro → meeting: 30-50% - Meeting → second meeting: 30-40% - Second meeting → term sheet: 10-20% - Term sheet → close: 70-90% ### Tiering Strategy **Tier 1 (Dream investors, 5-8):** Your ideal lead investors. Don't pitch them first — practice on Tier 3. **Tier 2 (Strong fit, 15-20):** Good stage/sector fit. Many will become your actual lead. **Tier 3 (Practice + optionality, 20-30):** Reasonable fit. Use for pitch practice and creating momentum. **Tier 4 (Followers, 10-20):** Angels, smaller funds. Good for filling out the round after lead is set. **CRITICAL RULE:** Pitch Tier 3 first (weeks 1-2), then Tier 2 (weeks 2-3), then Tier 1 (weeks 3-4). By the time you hit your dream investors, your pitch is sharp and you may already have term sheets. --- ## Phase 3: Pitch Deck Construction ### The 12-Slide Framework Every great pitch deck follows this structure. Each slide has ONE job. #### Slide 1: Title - Company name + one-line description - Your name, title, contact - "We help [customer] do [outcome] by [how]" #### Slide 2: Problem - Paint the pain. Make the investor FEEL it. - Use a specific story or example, not abstract stats - "Today, [persona] struggles with [specific pain]" - Show the cost of the problem (time, money, opportunity) #### Slide 3: Solution - Your product in 2-3 sentences - Screenshot or demo GIF (visual > words) - Focus on the "magic moment" — the thing that makes people say "wow" - DO NOT list features. Show the transformation. #### Slide 4: Why Now - What changed that makes this possible/necessary TODAY? - Technology shift? Regulatory change? Behavior change? Market timing? - This is the most underrated slide. Nail it. #### Slide 5: Market Size - TAM → SAM → SOM (bottoms-up, NOT top-down) - Show your math: [# of target customers] × [annual contract value] = SAM - SAM should be $1B+ for VC-scale - Show the growth trajectory of the market #### Slide 6: Product / How It Works - 3-step process or simple diagram - Make it feel inevitable and obvious - If you need more than 3 steps, simplify #### Slide 7: Traction - THE most important slide after Seed stage - Revenue graph (up and to the right) - Key metrics: ARR, MRR growth, customers, retention, NPS - Logos of notable customers - If pre-revenue: waitlist, LOIs, pilot results, engagement metrics #### Slide 8: Business Model - How you make money (clearly) - Pricing model + unit economics - ACV, gross margin, LTV/CAC, payback period - Expansion revenue potential #### Slide 9: Competition - 2x2 matrix (NOT a feature comparison table) - Your axes should be the dimensions where you win - Show why you're in the top-right quadrant - Mention "why not just use X?" for the obvious alternatives #### Slide 10: Team - Founder photos + relevant experience - Why THIS team for THIS problem? - Highlight: domain expertise, previous exits, technical depth - Key hires made + key hires planned #### Slide 11: The Ask - How much you're raising - Use of funds (3-4 categories max) - What milestones this gets you to - "This round gets us to [milestone] which positions us for [next round]" #### Slide 12: Appendix (optional) - Detailed financials - Product roadmap - Additional metrics - Customer testimonials ### Pitch Deck Quality Checklist - [ ] Total slides: 10-15 (12 ideal) - [ ] Each slide has ONE key message - [ ] Can be understood in 3 minutes without narration - [ ] Fonts are readable at projection size (24pt minimum) - [ ] Consistent design (colors, fonts, layout) - [ ] No walls of text (max 30 words per slide) - [ ] Traction slide has real numbers, not vanity metrics - [ ] Market size is bottoms-up with shown math - [ ] Ask is specific (amount + use of funds + milestones) - [ ] Team slide shows founder-market fit ### The 60-Second Elevator Pitch ``` [Company] helps [specific customer] solve [specific problem]. Today, [customer] has to [painful current state], which costs them [quantified pain]. We built [solution] — a [category] that [key differentiator]. In [timeframe], we've [best traction metric]. We're growing [growth rate]. We're raising [amount] to [key milestone]. [Firm name] would be a great fit because [specific reason]. ``` --- ## Phase 4: Outreach & Meeting Strategy ### Warm Introduction Template **To the connector:** ``` Hi [Name], I'm raising a [seed/Series A] round for [Company] — we're [one-line description]. We've [best traction metric] and growing [rate]. I noticed [Investor Name] at [Firm] recently invested in [similar company] and thought there could be a strong fit. Would you be comfortable making an intro? I've drafted a forwardable blurb below. [Forwardable blurb — 3-4 sentences about the company, traction, what you're raising] Really appreciate it either way. ``` ### Cold Outreach Template (last resort) ``` Subject: [Company] — [one compelling metric] Hi [Investor first name], [One sentence about why you're reaching out to THEM specifically — recent investment, blog post, tweet]. I'm building [Company] — [one-line description]. We're at [best metric] and growing [rate] MoM. Would love 20 minutes to share what we're seeing in [market]. Happy to work around your schedule. [Your name] [Company] | [website] ``` **Cold outreach rules:** - NEVER send identical emails to multiple investors - Reference something specific about THEM (shows research) - Lead with your BEST metric - Keep under 100 words - Send Tuesday-Thursday, 8-10 AM their timezone ### First Meeting (30 min) Playbook **Structure:** - 0-2 min: Rapport + agenda setting - 2-15 min: Walk through pitch (abbreviated — they've seen the deck) - 15-25 min: Q&A (this is where the real evaluation happens) - 25-28 min: Your questions for them - 28-30 min: Next steps **Your questions for them (ask 2-3):** 1. "What would you need to see to get conviction on this?" 2. "What's your typical decision timeline?" 3. "How do you typically work with portfolio companies post-investment?" 4. "What's your current fund deployment status?" 5. "Who else on your team would be involved in the decision?" **After the meeting (within 2 hours):** - Send thank you + any materials they requested - Note their concerns — address in follow-up - Update your CRM with status + next action ### Investor Objection Response Framework | Objection | What They Mean | How to Respond | |-----------|---------------|----------------| | "Too early for us" | Traction insufficient | "What metrics would signal the right time?" (plants seed for future) | | "Not in our thesis" | Sector/model mismatch | Accept gracefully. Ask for referrals to better-fit investors | | "Valuation is too high" | They see risk you don't | "What comparable deals have you seen? Let's discuss what drives our thinking" | | "We need to see more traction" | Interested but not convinced | "Happy to share monthly updates. What metric matters most to you?" | | "Let me discuss with partners" | Could be real or polite pass | "Great. When's your next partner meeting? I'll send a follow-up brief" | | "We just invested in a competitor" | True conflict | Move on. Ask if they know investors who'd be interested | | "The market is too small" | Your TAM story isn't convincing | Reframe with bottoms-up math. Show expansion potential | | "What's your moat?" | Worried about defensibility | Network effects, data advantages, switching costs, brand. Be specific | --- ## Phase 5: Financial Model & Projections ### 3-Statement Model Essentials Investors expect a 3-5 year financial model. Keep it simple but defensible. ```yaml financial_model: revenue_assumptions: current_arr: "" growth_rate_year1: "" # conservative growth_rate_year2: "" growth_rate_year3: "" acv: "" new_customers_per_month: "" churn_rate_annual: "" expansion_rate: "" cost_assumptions: cogs_percentage: "" # target <30% for SaaS engineering_headcount: [] # by quarter sales_headcount: [] g_and_a_headcount: [] avg_salary_eng: "" avg_salary_sales: "" marketing_spend_percentage: "" # of revenue key_outputs: gross_margin: "" # target >70% SaaS burn_rate_monthly: "" runway_months: "" breakeven_date: "" arr_at_next_raise: "" ``` ### Revenue Projection Rules 1. **Bottom-up only.** [# sales reps] × [deals/rep/month] × [ACV] = revenue. NOT "if we get 1% of the market." 2. **Show your assumptions.** Every number should trace back to a testable assumption. 3. **Three scenarios.** Conservative (60% probability), Base (30%), Optimistic (10%). Present Base, have Conservative ready. 4. **Growth rate benchmarks:** | ARR | Good Growth | Great Growth | Exceptional | |-----|------------|--------------|-------------| | $0-$1M | 15% MoM | 20% MoM | 30%+ MoM | | $1M-$5M | 2.5x YoY | 3x YoY | 4x+ YoY | | $5M-$20M | 2x YoY | 2.5x YoY | 3x+ YoY | | $20M+ | 60% YoY | 80% YoY | 100%+ YoY | ### Unit Economics Deep Dive ```yaml unit_economics: ltv: arpu_monthly: 0 gross_margin: 0.0 # percentage churn_monthly: 0.0 # percentage formula: "ARPU × Gross Margin / Monthly Churn" result: 0 cac: total_sales_marketing_spend: 0 # last quarter new_customers_acquired: 0 # last quarter formula: "S&M Spend / New Customers" result: 0 ltv_to_cac_ratio: 0 # target >3x cac_payback_months: 0 # target <18 months health_check: ltv_cac_above_3x: false payback_under_18_months: false gross_margin_above_70: false net_dollar_retention_above_100: false ``` **Health benchmarks (SaaS):** | Metric | Poor | OK | Good | Great | |--------|------|-----|------|-------| | LTV:CAC | <2x | 2-3x | 3-5x | >5x | | CAC Payback | >24mo | 18-24mo | 12-18mo | <12mo | | Gross Margin | <60% | 60-70% | 70-80% | >80% | | Net Revenue Retention | <90% | 90-100% | 100-120% | >120% | | Logo Churn (annual) | >15% | 10-15% | 5-10% | <5% | --- ## Phase 6: Term Sheet Negotiation ### Key Term Sheet Components ```yaml term_sheet: economics: pre_money_valuation: "" investment_amount: "" post_money_valuation: "" # pre + investment price_per_share: "" shares_issued: "" control: board_seats: founders: 0 investors: 0 independent: 0 protective_provisions: [] # list of investor veto rights liquidation: preference: "" # 1x non-participating (standard) | 1x participating | 2x participation_cap: "" # if participating anti_dilution: "" # broad-based weighted average (standard) | full ratchet (bad) pro_rata_rights: true # investors right to maintain ownership % vesting: founder_vesting: "" # 4 years, 1 year cliff (standard) acceleration: "" # single trigger | double trigger | none other: option_pool: "" # 10-15% post-money (negotiate pre vs post) drag_along: true right_of_first_refusal: true information_rights: true no_shop_period: "" # 30-60 days typical ``` ### Term Sheet Red Flags 🚩 | Term | Standard | Acceptable | Red Flag | |------|----------|------------|----------| | Liquidation preference | 1x non-participating | 1x participating with 3x cap | >1x or uncapped participating | | Anti-dilution | Broad-based weighted average | Narrow-based weighted average | Full ratchet | | Board composition | Founder majority early stage | Equal (2-2-1 with independent) | Investor majority at seed | | Option pool | 10% post-money | 10-15% pre-money | >20% pre-money | | Vesting acceleration | Double-trigger | Single-trigger for CEO only | No acceleration | | No-shop period | 30 days | 45 days | >60 days | | Protective provisions | Standard (sale, new round, debt) | Expanded but reasonable | Veto on hiring, spending >$X | | Pay-to-play | None at seed | Reasonable at Series A+ | Punitive conversion terms | ### Negotiation Playbook **Rule 1: Optimize for valuation LAST.** The order of importance: 1. Amount raised (enough runway for 18-24 months) 2. Board composition (maintain founder control early) 3. Liquidation preferences (1x non-participating) 4. Anti-dilution protection (broad-based weighted average) 5. Valuation (important but not #1) **Rule 2: Get multiple term sheets.** BATNA is everything. Even one competing offer changes the dynamic completely. **Rule 3: Negotiate the option pool.** If they want 15% post-money, that dilutes YOU more than them. Push for smaller pool or post-money sizing. **Rule 4: Understand the math.** ``` Founder ownership = 1 - (investor_shares + option_pool) / total_shares Example: $5M pre + $2M raise + 10% pool - Post-money: $7M - Investor owns: $2M / $7M = 28.6% - Pool: 10% - Founders: 61.4% With 15% pool pre-money: - "Pre-money" is really $5M - 15% = $4.25M effective - Investor owns: $2M / $6.25M = 32% - Pool: 15% - Founders: 53% ← see the difference? ``` **Rule 5: Get a good lawyer.** Don't negotiate term sheets yourself. Startup lawyers (Cooley, Wilson Sonsini, Gunderson, Orrick) know what's standard. Budget $15-30K for a priced round. ### Word-for-Word Negotiation Scripts **On valuation:** "We've seen comparable companies at our stage and traction level — [example 1], [example 2] — raise at [X] to [Y] pre-money. Given our [specific metric that's strong], we believe [your number] reflects fair value. What's driving your thinking on valuation?" **On option pool:** "We're happy with a 10% pool — that covers our hiring plan for the next 18 months. A 15% pool pre-money effectively reduces our valuation by [$ amount]. Could we either reduce the pool to 10% or calculate it post-money?" **On liquidation preference:** "We'd prefer standard 1x non-participating. Participating preferred with a cap could work, but uncapped participation significantly changes the economics for founders and early employees in moderate outcomes." **On board seats:** "At this stage, we think a 3-person board with 2 founders + 1 investor makes sense. We'd love your input and governance, but founder control is important to us while we're still finding our groove." --- ## Phase 7: Due Diligence Preparation ### DD Readiness Checklist Prepare these BEFORE you start fundraising. Scrambling during DD kills deals. #### Corporate Documents - [ ] Certificate of incorporation (Delaware C-Corp preferred) - [ ] Bylaws - [ ] Board minutes (all meetings) - [ ] Stockholder agreements - [ ] Cap table (fully diluted, option grants, vesting schedules) - [ ] 83(b) election filings for all founders - [ ] State registrations / qualifications #### Financial - [ ] Financial statements (last 2 years + YTD) - [ ] Bank statements (last 12 months) - [ ] Tax returns (federal + state, last 2 years) - [ ] Revenue by customer (concentration analysis) - [ ] Accounts receivable aging - [ ] Budget vs actuals - [ ] Financial model (3-5 year projections) #### IP & Technology - [ ] Patent filings / applications - [ ] Trademark registrations - [ ] IP assignment agreements (ALL employees + contractors) - [ ] Open source usage audit - [ ] Technology architecture overview - [ ] Security audit / SOC 2 status #### Team & HR - [ ] Employee list with titles, start dates, compensation - [ ] Employment agreements (all employees) - [ ] Contractor agreements (all contractors) - [ ] Option grant schedule - [ ] Benefits summary - [ ] Key person dependencies #### Legal - [ ] Customer contracts (template + material contracts) - [ ] Vendor agreements (material) - [ ] Pending / threatened litigation - [ ] Regulatory compliance status - [ ] Privacy policy + terms of service - [ ] Insurance policies #### Metrics - [ ] Monthly revenue / ARR waterfall (last 12+ months) - [ ] Cohort retention data - [ ] Unit economics (LTV, CAC, payback) - [ ] Pipeline / bookings data - [ ] NPS / customer satisfaction data - [ ] Churn analysis by cohort ### Data Room Organization ``` 📁 Data Room/ ├── 📁 1-Corporate/ │ ├── Certificate_of_Incorporation.pdf │ ├── Bylaws.pdf │ ├── Board_Minutes/ │ └── Cap_Table_[date].xlsx ├── 📁 2-Financial/ │ ├── Financial_Statements/ │ ├── Tax_Returns/ │ ├── Bank_Statements/ │ └── Financial_Model_[date].xlsx ├── 📁 3-IP_Technology/ │ ├── IP_Assignments/ │ ├── Architecture_Overview.pdf │ └── Security_Audit.pdf ├── 📁 4-Team_HR/ │ ├── Org_Chart.pdf │ ├── Employment_Agreements/ │ └── Option_Grants.xlsx ├── 📁 5-Legal/ │ ├── Customer_Contracts/ │ ├── Vendor_Agreements/ │ └── Insurance_Policies/ ├── 📁 6-Metrics/ │ ├── Monthly_Metrics_Dashboard.xlsx │ ├── Cohort_Analysis.xlsx │ └── Pipeline_Report.xlsx └── 📁 7-Pitch_Materials/ ├── Pitch_Deck_[date].pdf ├── Executive_Summary.pdf └── Product_Demo_Link.md ``` --- ## Phase 8: Cap Table Management ### Cap Table Fundamentals ```yaml cap_table: company: "" date: "" total_authorized_shares: 10000000 common_stock: - holder: "Founder 1" shares: 0 vesting: "4yr/1yr cliff" vested_shares: 0 percentage: 0.0 - holder: "Founder 2" shares: 0 vesting: "4yr/1yr cliff" vested_shares: 0 percentage: 0.0 preferred_stock: - round: "Seed" investor: "" shares: 0 price_per_share: 0.0 amount_invested: 0 percentage: 0.0 liquidation_preference: "1x non-participating" option_pool: total_reserved: 0 granted: 0 exercised: 0 available: 0 percentage_of_fully_diluted: 0.0 fully_diluted_shares: 0 # common + preferred + all options ``` ### Dilution Math Every Founder Must Know **Round-by-round dilution example:** | Event | Founders | Seed Investor | Option Pool | Series A | |-------|----------|---------------|-------------|----------| | Formation | 100% | - | - | - | | Option pool (10%) | 90% | - | 10% | - | | Seed ($2M at $8M pre) | 72% | 20% | 8% | - | | Option pool refresh (+5%) | 68.4% | 19% | 12.6% | - | | Series A ($10M at $40M pre) | 54.7% | 15.2% | 10.1% | 20% | **Key insight:** After a typical Seed + Series A, founders often own 50-60%. This is NORMAL. The goal isn't to minimize dilution — it's to maximize the value of your remaining shares. **$100M exit at 55% ownership = $55M. $500M exit at 40% ownership = $200M.** Take the dilution that unlocks the bigger outcome. ### Pro-Rata Rights Pro-rata rights let existing investors maintain their ownership percentage in future rounds. **When it matters:** If a Seed investor has 15% and doesn't participate pro-rata in Series A, they get diluted to ~12%. With pro-rata, they invest enough to maintain 15%. **Founder impact:** More pro-rata participation = less room for new investors = potential conflict. Manage this by setting clear allocation frameworks. --- ## Phase 9: Fundraising Process Management ### The Fundraising Sprint (8-12 Week Framework) **Weeks 1-2: Preparation** - Finalize pitch deck - Build financial model - Set up data room - Build target list (50-80 investors) - Write outreach templates - Request warm intros (takes 1-2 weeks to materialize) **Weeks 3-4: Tier 3 + Early Tier 2 Meetings** - Practice pitch with 10-15 investors - Refine based on questions and feedback - Identify common objections, prepare responses - Update deck based on learnings **Weeks 5-6: Tier 1 + Tier 2 Meetings** - Pitch your dream investors with a polished deck - Create urgency with momentum ("we have 3 partner meetings next week") - Share any early interest/term sheets (carefully) **Weeks 7-8: Term Sheets + Negotiation** - Receive and compare term sheets - Negotiate key terms - Check investor references (CRITICAL — call 3-5 portfolio founders) - Select lead investor **Weeks 9-12: Close** - Finalize legal docs with lawyers - Fill remaining allocation (angels, smaller checks) - Wire transfer + board setup - Announce (if desired) ### Weekly Pipeline Dashboard ```yaml fundraising_pipeline: week: 0 date: "" funnel: total_targets: 0 outreach_sent: 0 meetings_scheduled: 0 meetings_completed: 0 second_meetings: 0 partner_meetings: 0 term_sheets: 0 conversion_rates: outreach_to_meeting: 0.0 meeting_to_second: 0.0 second_to_partner: 0.0 partner_to_ts: 0.0 momentum_signals: - "" # "3 partner meetings scheduled for next week" concerns: - "" # "Common pushback on market size" next_week_actions: - "" ``` ### Follow-Up Cadence | After | Action | Template | |-------|--------|----------| | First meeting | Thank you + materials | Send within 2 hours | | 1 week | Follow-up + update | Share new metric or customer win | | 2 weeks | Check-in | "Wanted to share [progress]" | | Monthly | Investor update | Send to all investors in pipeline | | Pass | Graceful accept | Ask for referrals + add to update list | ### Monthly Investor Update Template ``` Subject: [Company] — [Month] Update: [headline metric] Hi [Name], Quick update on [Company]: 📈 Key Metrics • ARR: $X (+Y% MoM) • Customers: X (+Y new) • [Key operational metric]: X 🏆 Wins • [Biggest win this month] • [Second win] 🔥 Challenges • [Honest challenge — shows self-awareness] 🎯 Next Month • [Key goal 1] • [Key goal 2] We're raising [amount] — happy to chat if this is interesting. Best, [Name] ``` **Investor update rules:** - Send monthly, even before you're raising - Be honest about challenges (builds trust) - Keep under 200 words - Include 1-2 specific metrics with trajectory - Send to everyone — passed investors sometimes come back --- ## Phase 10: Post-Close & Governance ### First 30 Days After Close - [ ] Set up board meeting cadence (quarterly) - [ ] Send announcement to team, customers, press (if desired) - [ ] Update cap table and legal docs - [ ] Set up board reporting package - [ ] Have 1:1 onboarding with each board member - [ ] Begin hiring per use-of-funds plan - [ ] Set up monthly investor update cadence ### Board Meeting Template ```yaml board_meeting: date: "" duration: "90 minutes" agenda: - topic: "CEO Update" duration: "15 min" content: "High-level strategy, key decisions, morale" - topic: "Financial Review" duration: "15 min" content: "Revenue, burn, runway, budget vs actual" - topic: "Product & Metrics" duration: "15 min" content: "Key metrics, product roadmap, customer feedback" - topic: "Deep Dive Topic" duration: "20 min" content: "One strategic topic for board input (GTM, hiring, partnerships)" - topic: "Open Discussion" duration: "15 min" content: "Board member questions, concerns, opportunities" - topic: "Closed Session" duration: "10 min" content: "Exec compensation, sensitive matters" ``` ### Board Package (Send 3 Days Before Meeting) | Section | Contents | |---------|----------| | Executive Summary | 1-page: wins, challenges, key decisions, help needed | | Financial Dashboard | P&L, balance sheet, cash flow, runway, burn | | Metrics Dashboard | ARR, growth, retention, pipeline, conversion | | Product Update | Shipped features, roadmap, key customer feedback | | Team Update | Headcount, open roles, notable hires/departures | | Strategic Decisions | 1-2 topics requiring board input or approval | --- ## Phase 11: Alternative Fundraising Strategies ### SAFE Notes (Pre-Seed / Seed) **When to use:** Pre-seed and seed when speed matters more than precision. | SAFE Type | Best For | Watch Out | |-----------|----------|-----------| | Valuation Cap only | Most common. Sets maximum conversion price | Cap IS your effective valuation | | Discount only | Rare. X% discount to next round price | Risky — no ceiling on conversion price | | Cap + Discount | Best protection for investors | Most dilutive for founders | | MFN (Most Favored Nation) | Very early, no valuation signal | Converts at best terms given to any investor | **SAFE best practices:** - Use Y Combinator standard SAFE (don't modify) - Post-money SAFEs are now standard (clearer dilution math) - Stack no more than $2-3M in SAFEs before pricing a round - Track ALL SAFEs in your cap table (they WILL convert) ### Revenue-Based Financing **When to use:** You have revenue but don't want to give up equity. | Provider | Typical Terms | Best For | |----------|--------------|---------| | Pipe | Advance on ARR | SaaS with annual contracts | | Clearco | % of revenue repayment | E-commerce, DTC | | Lighter Capital | Revenue share | SaaS $200K-$5M ARR | | Traditional bank | Venture debt | Post-Series A | ### Venture Debt **When to use:** Extend runway between equity rounds without dilution. - Typical terms: 2-3 year term, interest + warrants (0.5-2% of equity) - Usually available after Series A (sometimes Seed) - DON'T use venture debt as a substitute for equity — use it as a supplement - Rule: Never take venture debt that represents >25% of your last equity raise --- ## Quality Scoring ### 100-Point Fundraising Readiness Rubric | Dimension | Weight | Score (0-10) | |-----------|--------|-------------| | Traction & Metrics | 20% | /10 | | Pitch & Story | 15% | /10 | | Financial Model | 15% | /10 | | Team & Founder-Market Fit | 15% | /10 | | Market Opportunity | 10% | /10 | | Data Room Readiness | 10% | /10 | | Investor Pipeline Quality | 10% | /10 | | Legal & Corporate Structure | 5% | /10 | **Weighted score = Σ (weight × score × 10)** | Score | Grade | Action | |-------|-------|--------| | 85-100 | A | Launch fundraise immediately | | 70-84 | B | Fix 1-2 gaps, launch in 2 weeks | | 55-69 | C | Significant work needed (4-6 weeks) | | 40-54 | D | Major gaps — build more traction first | | 0-39 | F | Not ready. Focus on product-market fit | --- ## Common Mistakes | # | Mistake | Fix | |---|---------|-----| | 1 | Raising too early (weak metrics) | Build traction first. Bad first impressions are permanent | | 2 | Raising too little (12 months runway) | Raise for 18-24 months. Fundraising takes longer than expected | | 3 | No warm intros (all cold outreach) | Network for 6 months before you need to raise | | 4 | Pitching dream investors first | Practice on Tier 3, then work up to Tier 1 | | 5 | Optimizing only for valuation | Terms matter more. 1x non-participating > higher valuation with participating | | 6 | No BATNA (only one term sheet) | Run a parallel process. Multiple term sheets = leverage | | 7 | Ignoring investor references | Call 3-5 portfolio founders. Ask about behavior in bad times | | 8 | Sloppy data room | Prepare everything before you start. Scrambling kills momentum | | 9 | Top-down market sizing | Bottom-up always. Show your math | | 10 | Not sending investor updates | Monthly updates to all investors, even those who passed | --- ## Edge Cases ### First-Time Founder - Lean on advisors who've raised before - Consider an accelerator (YC, Techstars) for credibility + network - Accept slightly lower valuation for a great investor with strong brand - Double your timeline estimates — everything takes longer the first time ### Down Round - Try alternatives first: bridge round, extension, venture debt - If unavoidable: negotiate pay-to-play provisions (forces all investors to participate) - Communicate proactively with existing investors — no surprises - Reframe the narrative: "We're resetting to grow sustainably" ### Bootstrapped → First Raise - Lead with your profitability story (rare and valuable) - You have MASSIVE leverage — you don't NEED the money - Negotiate from strength: higher valuation, better terms, board control - Consider raising a small round ($1-2M) to test the VC relationship ### Founder Solo (No Co-Founder) - Address it head-on: "I'm looking for my #2 — this round funds that search" - Show strong advisors / early team members - Demonstrate extreme execution velocity as proof you can recruit - Consider finding a co-founder before raising (strongest signal) ### International Founder (Non-US) - Incorporate in Delaware (non-negotiable for US VCs) - Use Stripe Atlas, Clerky, or Firstbase for setup - Consider US-based angels first for credibility - Time zone overlap with US investors matters — schedule accordingly --- ## Natural Language Commands When this skill is active, the agent responds to: 1. "Assess my fundraising readiness" → Run Phase 1 assessment 2. "Build my investor target list" → Phase 2 pipeline creation 3. "Review my pitch deck" → Phase 3 quality checklist 4. "Draft investor outreach" → Phase 4 templates 5. "Build my financial model" → Phase 5 projections 6. "Analyze this term sheet" → Phase 6 red flag analysis 7. "Prepare my data room" → Phase 7 checklist 8. "Calculate dilution for [amount] at [valuation]" → Phase 8 math 9. "Plan my fundraising sprint" → Phase 9 timeline 10. "Prepare my board meeting" → Phase 10 package 11. "Compare SAFE vs priced round" → Phase 11 alternatives 12. "Score my fundraising readiness" → Quality rubric --- *Built by AfrexAI — Autonomous AI agents for business growth.* *⚡ Level up your fundraising with industry-specific context:* *[AfrexAI Context Packs — $47](https://afrexai-cto.github.io/context-packs/) — SaaS, Fintech, Healthcare, and 7 more verticals.* *🔗 More free skills by AfrexAI:* - `afrexai-founder-os` — Complete founder operating system - `afrexai-investor-engine` — Investment analysis from the investor side - `afrexai-pricing-strategy` — Pricing optimization - `afrexai-business-model-engine` — Business model design - `afrexai-saas-billing-engine` — SaaS billing & subscription management


Security scan verdicts — ClawScan: clean | static analysis: clean | VirusTotal: clean | SkillSpector: clean (LOW)