WT3 Podcast’s Post

5 Essential Terms Every Founder Should Know In one of our episodes, we had the privilege of hosting Sebastian S. from Schaeffler's corporate venture capital arm. He shared crucial knowledge that every founder needs before approaching investors. Here's a breakdown of the five essential terms you should understand: 1. Investment Vehicles. Familiarise yourself with different ways to raise money, such as SAFEs (Simple Agreement for Future Equity) and convertible notes. These instruments determine how investors provide capital to your startup. 2. Share Types. Learn the distinction between preferred shares and common shares. This knowledge is crucial as it affects investor rights and your equity structure. 3. Participation Rights. Understand how participation rights in preferred shares work. These rights can significantly impact the distribution of proceeds in case of a liquidity event. 4. Option Pools. Educate yourself about employee stock option pools. These are essential for attracting and retaining talent in your startup. 5. Negotiation Basics. Be aware of what you're negotiating. As Sebastian expertly puts it: "If you are absolutely clueless and go into a negotiation, there is a high chance that the negotiation will not end in your favour." Remember, being informed is your best defence in negotiations. Whether you're in Web3, blockchain, or any innovative tech space, this knowledge is power. Check out the full episode, available on X, Spotify & YouTube for more invaluable insights on navigating the startup funding landscape. What's your biggest challenge in understanding startup funding terms? Share below! #WT3Podcast #StartupFunding #VentureCapital #EntrepreneurshipTips

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