About Fundraising

When it comes to fundraising for a company, there are three main types of funding. Some people may consider "company profits" as a form of fundraising, but it's not really fundraising, is it? Let's focus on the actual types of fundraising:

1. Grants and subsidies

2. Dead Finance (Loans)

3. Equity financing (investment)

If you're a startup, the goal is to achieve rapid growth. It's important to pursue a business that can achieve Exponential Growth. Therefore, Equity financing (investment) is generally the default option.

Now, let's talk about the basics of equity financing. It involves factors such as Variation (Corporate Value), Dilution of Ownership, and Voting rights.

Fundraising is an ongoing process, usually done multiple times before going public (around 2-5 rounds). Timing is crucial because it can lead to dilution of ownership (Dilution of Ownership). It's important to raise funds at a phase where investors can value the company highly. This can be achieved when certain milestones are reached, such as the What is PMF Score or reaching the PMF (Product-Market Fit) stage.

It's essential to secure the necessary funds for the next phase of fundraising. It is recommended to have funds equivalent to the "projection + 6 months" amount. 🔐 Goals for each phase (round) should be kept in mind. Keep in mind that fundraising is done to accelerate growth, which means the Burn rate (monthly decrease in funds) will increase, making it challenging to decrease.

Here is a useful reference: https://gyazo.com/7ae4554b249f18ad20fe55554c62b3f1