When this skill is activated, always start your first response with the 🧢 emoji.

Startup Fundraising

Fundraising is the process of exchanging equity (or a promise of future equity) for capital to accelerate a startup's growth. Done well, it funds the team and runway needed to reach the next milestone. Done poorly, it creates misaligned investors, excessive dilution, and governance problems that compound over years. This skill equips an agent to build compelling pitch materials, negotiate founder-friendly terms, manage the diligence process, write investor updates, model dilution, and choose the right instrument for each stage.

When to use this skill

Trigger this skill when the user:

• Needs to build or review a pitch deck for investors
• Asks about term sheet terms, investor rights, or negotiation strategy
• Is preparing a data room for due diligence
• Wants to write an investor update or board update
• Needs to model dilution, pro-rata, or ownership across multiple rounds
• Is deciding between a SAFE, convertible note, or priced round
• Asks about valuation, cap table management, or option pool sizing
• Needs to build or manage an investor pipeline and outreach strategy

Do NOT trigger this skill for:

• SaaS metrics analysis or revenue modeling - use the saas-metrics skill
• Legal document drafting or securities law advice - recommend engaging counsel

Key principles

1. Raise when you don't need to - The best time to fundraise is when you have leverage: strong metrics, multiple term sheets, or a credible alternative path to profitability. Fundraising from a position of desperation forces bad terms. Extend runway, cut burn, reach a milestone - then open the round.

2. Fundraising is a full-time job - timebox it - A founder running a process while also running the company will do both poorly. Set a defined window (6-8 weeks for seed, 8-12 weeks for Series A), run all investor conversations in parallel to create urgency, and close fast. Drag kills momentum and leaks information.

3. SAFE > convertible note for early stage - SAFEs have no maturity date, no interest accrual, and no debt on the cap table. Convertible notes accrue interest and have a maturity date that creates pressure to convert or repay. For pre-seed and seed, default to a YC SAFE (post-money valuation cap, MFN clause). Use convertible notes only if investors insist or if you need bridge financing on an existing priced round.

4. Dilution compounds - be strategic - Every round dilutes all prior shareholders proportionally. A 20% seed round, 20% Series A, and 20% Series B leaves founders with 51% of what they started with before any option pool refreshes. Model dilution through your target exit before agreeing to any terms. The option pool shuffle (investors requiring a larger pool pre-money) is the single most founder-dilutive mechanic in term sheets.

5. Investor-market fit matters - The wrong investor is worse than no investor. A consumer VC leading a B2B enterprise deal, or a growth fund leading a seed round, creates a board dynamic and expectation mismatch that will resurface at every decision point. Research every investor's portfolio, check-size history, and founder reputation before taking a meeting.

Core concepts

Funding stages map to company maturity. Pre-seed ($250K-$2M) validates the idea with early product and founder quality. Seed ($1M-$5M) funds finding product-market fit with initial traction. Series A ($5M-$20M) scales a repeatable go-to-market motion with clear unit economics. Series B ($20M-$80M) accelerates a proven model. Later stages (C, D, pre-IPO) fund market dominance and expansion. Each stage has different investor types, diligence depth, and typical deal structures.

Instruments determine how money enters the cap table. A SAFE (Simple Agreement for Future Equity) converts into equity at the next priced round at a discount or valuation cap - whichever is more favorable to the investor. A convertible note is a debt instrument that converts to equity; it accrues interest (typically 5-8% annually) and has a maturity date (12-24 months). A priced round sets a definitive pre-money valuation today, issues new shares, and creates a new share class (typically Series Preferred) with specific rights.

Term sheet economics encompass the terms that directly affect founder ownership and control: pre-money valuation (how much the company is worth before new money), post-money valuation (pre-money + investment), option pool size and timing (pre- vs post-money), liquidation preference (1x non-participating is standard; participating preferred is investor-friendly), anti-dilution provisions (broad-based weighted average is standard; full ratchet is punishing), and pro-rata rights (investors' right to maintain their ownership percentage in future rounds).

Dilution mechanics operate on shares outstanding. When new shares are issued in a round, all existing shareholders' percentages decrease proportionally. The key formula: new ownership % = old shares / (old shares + new shares issued). The option pool shuffle increases dilution further: investors require a specific option pool size post-round, but if the pool is sized pre-money, founders bear the entire dilution of the pool creation before the round closes.

Common tasks

Build a pitch deck - 12 slides framework

A pitch deck tells a coherent story: problem, solution, why now, why us, and what we need. Each slide has one job.

Slide order and content:

Design rules:

• One idea per slide; if a slide needs two headers it is two slides
• No more than 30 words of body text per slide
• Use real data over projections wherever possible
• Market size must be bottom-up: Total Addressable (universe) > Serviceable Addressable (reachable) > Serviceable Obtainable (realistic 3-year target)

Avoid bullet-point walls. Investors scan decks in 3-4 minutes before deciding whether to read deeply. Every slide must work as a visual first.

Negotiate a term sheet - key terms explained

When you receive a term sheet, focus on economics first, then control, then everything else. Most terms are standard; a few are founder-critical.

Economics terms:

Control terms: