Guiding you through the VC fundraising process

Most successful founders will tell you that getting a VC to invest in your business is often the start of a long and disrupting process. Having a fundraising plan and getting your house in order helps minimise disruption to your business, avoids wasting time and makes the process as straightforward as possible.

Get yourself ready for a VC fundraising with our top 10 tips

So what issues arise during the process and how do you solve them? Based on our wide ranging VC and company side experience, we’ve pulled together a list of the key points to consider as you approach a VC investment. We walk you through the process and what is needed at each stage so you don’t get any nasty surprises along the way.

The benefit to you? You are mentally and physically prepared for the process and your relationship with the VC is one built on solid foundations.

Read our top 10 tips in full here. 

Making sense of the VC Term Sheet

A term sheet outlines the principal terms and conditions governing a VC investment. Although they are meant to be a summary, term sheets often contain complex terminology and jargon, which means they can cause confusion for founders. Although most terms are not legally binding, once something is agreed in a term sheet it can be difficult to negotiate.

Understanding the terms and the implications is an important aspect of protecting your position through the fundraising and in the future. That’s why we’ve prepared a two-part blog post explaining the key terms you can expect to see in a term sheet.

In part one we look at the valuation and number of shares, as well as positive undertakings, consent matters and information rights. Read it here.

In part two we explore founder vesting, good leaver/ bad leaver clauses, anti-dilution ratchets rights and “drag and tag” provisions. We also look at the legally binding provisions in a term sheet. If you’re unsure what any of the terms mean, please get in touch so we can advise you on the implications before you sign the term sheet and help negotiate with your investors. Read part two here.

Understanding Convertible loan notes and VC bridging rounds

Raising VC money can be challenging with many VC-backed companies only reaching sustainable profit after multiple rounds of VC funding. The VC fundraising process ranges from “seed” or “pre-series A” rounds, through to what is known as “follow the funding alphabet” e.g. Series A, B etc.

Sometimes during this process there can be a need for additional or “bridging” debt to keep the business trading. This is frequently offered in the form of a convertible loan or through convertible loan notes in the UK. These loans are often used at the beginning but also in the later stages of a VC fundraising to keep a company trading pending a sale or IPO exit.

So what are the usual terms associated with convertible loan notes and bridging rounds? What are the advantages and disadvantages of using them? And are there other options? Click here to find out more.