Raising Capital

SAFE (Simple Agreement for Future Equity) is the most common early-stage fundraising instrument. It allows investors to give you money now in exchange for the right to convert into equity in the future—usually at your next priced round.

Startup fundraising follows a typical path: friends & family, pre-seed, seed, Series A and beyond. Each stage has different investor expectations, documentation needs, and strategic goals for growth.

Liquidation preferences determine who gets paid (and how much) if your company exits. Typically granted to preferred shareholders, they affect founder payouts and influence deal outcomes in downside scenarios.

Protective provisions are rights that let investors block key decisions—like selling the company, raising more money, or changing the charter. They limit founder autonomy and need careful review.

Convertible notes are loans that convert into equity later, typically with interest and a valuation cap. They are similar to SAFEs but legally structured as debt and may include a maturity date and interest accrual.

Valuation caps and discounts are terms that determine how much equity investors receive when their SAFE converts. They balance risk and reward in early-stage investing and significantly affect founder dilution.

A down round occurs when you raise money at a lower valuation than your last round. It signals reduced investor confidence, impacts morale, and may trigger investor protections that increase dilution.

Drag-along rights allow majority investors to force minority shareholders to agree to a sale. While they streamline exits, they reduce minority control and can create tension if interests diverge.