Inexperienced founders of tech companies often need to raise money to finance the startup and early growth of their latest innovation. However, they don’t understand the finance process at the outset, and consequently, they may unknowingly make innocent mistakes that jeopardize the company’s potential success and can cost millions of dollars.
This book provides background information for tech founders to better understand the technology financing ecosphere. It starts with the 4Fs, followed by a discussion on the growth over the last 50 years in the number and sophistication of angels, venture capitalists, and their offshoots. The book helps founders understand the different motivations of angels and venture capitalists and how that impacts their approach to early-stage tech financing.
In addition, the book explains a key concept of early-stage tech finance that has been taboo to discuss: how VCs gain control of a company despite owning only a minority of the equity. Furthermore, it helps founders navigate the critical decision of whether to raise a large round of VC financing to build the next tech unicorn or pursue an early exit with a smaller but likely better chance of success.
Readers will learn why the macroeconomic environment has a greater effect on a company’s ability to finance than the abilities of the founders and the soundness of their business plan.
If knowledge is power than I hope that reading this book will help tech founders learn how to raise money or plan for an exit from a more powerful position.