Ascend Seattle venture capital startup toolkit

By Allen Yang

January 1, 1970

About this collection

A collection of helpful resources for early-stage startups, curated by Ascend VC.

Curated Sources

Top 9 LOI Gotchas B2B SaaS Founders Should Be Aware Of | Discretion Capital

When B2B SaaS founders receive a Letter of Intent (LOI) from a potential acquirer, they must be aware of several key gotchas that can significantly impact the acquisition's outcome. The purchase price may be misleading due to contingent payments or retention requirements. Working capital adjustments can affect the cash retained by the seller. Earnouts can be structured in ways that are difficult to achieve. The valuation basis may be based on forward-looking statements or contentious terms. LOIs may specify key personnel retention, financing contingencies, and due diligence terms. Escrow amounts and durations can be negotiated. The type of sale (asset or stock) has significant tax implications. Understanding these elements is crucial as LOIs are typically non-binding but set the stage for the final acquisition agreement. Founders should seek professional advice to navigate these complexities and ensure they receive the best possible outcome.

Key Takeaways

Founders should carefully review the purchase price structure to understand potential contingencies and retention requirements.
The valuation basis in an LOI can be contentious, especially if based on forward-looking statements or adjusted financial metrics.
Negotiating exclusivity and escrow terms is crucial to maintaining flexibility and minimizing potential losses.
The choice between an asset sale and a stock sale has significant tax implications, making tax counsel essential.
Understanding the buyer's financing structure and contingencies can help founders assess the likelihood of a successful acquisition.

Required reading for marketplace startups: The 20 best essays at andrewchen

Andrew Chen, a partner at Andreessen Horowitz, compiles a list of 20 essential essays for marketplace startups, covering topics such as the 'chicken and egg' problem, current trends in marketplaces, and product strategy. The essays discuss various aspects of marketplace startups, including liquidity hacking, trust-building, and the evolution of marketplaces into 'market networks.' Key authors featured include Jeff Jordan, Casey Winters, and Jonathan Golden, who share insights from their experiences at companies like Uber, Airbnb, and Grubhub. The list also covers marketplace metrics, such as GMV, revenue, and customer retention, as well as strategies for winning in low-frequency marketplaces.

Key Takeaways

Marketplace startups must address the 'chicken and egg' problem by implementing strategies such as liquidity hacking and trust-building to achieve initial liquidity.
The evolution of marketplaces into 'market networks' involves providing deeper tools and managing complex services, leading to increased transaction velocity and satisfaction.
Key metrics for marketplace success include GMV, revenue, customer retention, and liquidity, which should be tracked and analyzed to inform product strategy and optimize growth.

How to build your B2B product's go to market

The article discusses the importance of a well-planned go-to-market (GTM) strategy for B2B companies, using the author's experience at Atlassian as a case study. The author recounts how Atlassian's initial pricing model for Jira Service Desk was met with customer outrage, and how changing the pricing metric to agents who used the product led to significant customer satisfaction and revenue growth. The article then outlines the key components of a GTM strategy: identifying buyer personas, reaching target customers, and scaling. It highlights the importance of experimentation, measuring customer data, and understanding pricing structures. The author also shares insights from their 43-slide deck on GTM strategy for early-stage founders, which includes worksheets to help teams develop their GTM strategy.

Key Takeaways

A successful GTM strategy requires a deep understanding of customer needs and personas, as demonstrated by Atlassian's pivot on Jira Service Desk's pricing model.
Experimentation and data-driven decision-making are crucial in determining the most effective channels to reach target customers and scale a product.
Pricing strategy is a critical component of GTM, and companies should consider not just the level of pricing but also the metric and structure, such as freemium, free trial, or demo models.

Build a Team that Ships

The document outlines the management approach used at AngelList to build a team that effectively ships code. Key strategies include maintaining a small team of doers without middle managers, outsourcing non-core tasks, allowing team members to choose their projects, and enforcing a one-week deadline for tasks. The team uses peer-management through internal Yammer to track promises and deliveries. The approach prioritizes shipping code over perfection, resulting in a complex product with some half-baked features. The environment is not suitable for everyone, particularly non-engineers, and team members who cannot ship are released. The method has its drawbacks but focuses on accountability and shipping.

Key Takeaways

The approach emphasizes accountability by making individuals responsible for their projects and publicly committing to their tasks through internal Yammer.
Prioritizing shipping over perfection leads to a complex product with both valuable features and blind alleys, highlighting the trade-off between speed and quality.
The environment is challenging for non-engineers, indicating a potential limitation in the team's structure and valuation of different roles.
Releasing team members who cannot ship suggests a strict performance culture that may not be suitable for everyone, but allows individuals to find more appropriate environments.

Lessons for early stage founders

The document shares eight key lessons learned from the author's experience as a founder of Segment and as an angel investor in numerous startups. The lessons include the importance of setting clear goals, sending regular investor updates, launching products early and often, working in public to build momentum, hiring strategically, optimizing for learning and reducing existential risks, picking the right investment partner over the firm, and maintaining a sharp focus on key objectives. The author emphasizes that these lessons are derived from common mistakes made by early-stage founders across various industries and experience levels. By following these lessons, founders can avoid common pitfalls and improve their chances of success.

Key Takeaways

Founders should prioritize setting 'pretty good goals' over having no goals at all, as this helps drive progress and momentum.
Regular investor updates not only keep investors informed but also help founders clarify their thinking and stay focused on key objectives.
Launching products early and making them self-service can attract a wider user base and generate unexpected growth opportunities.
Working in public through content creation and open-source projects can significantly aid in hiring and customer acquisition by building credibility and visibility.
Optimizing for learning by identifying and addressing existential risks is crucial for rapid improvement and long-term success in startups.

What to do when your fundraising is not going well — Startup Hacks by Alex Iskold

The article discusses the challenges faced by startup CEOs during fundraising and provides guidance on how to overcome them. It highlights the importance of being prepared, having a strong investor pipeline, understanding investor feedback, and tailoring fundraising strategies to specific stages of financing, such as pre-seed, seed, and Series A rounds. The author emphasizes the need for founders to be honest about their readiness to fundraise, to focus on building a robust pipeline of potential investors, and to be responsive to investor feedback. The article also provides specific advice for different stages of fundraising, including the importance of friends and family investments in pre-seed rounds, the need for early traction in seed rounds, and the requirement for strong metrics in Series A rounds.

Key Takeaways

Founders should pause and assess their readiness to fundraise, rather than perpetually seeking funding without preparation.
Building a robust investor pipeline is crucial for successful fundraising, with a focus on targeting the right investors and getting introductions.
Understanding and addressing investor feedback is key to improving the chances of securing funding, whether it's related to traction, market size, or unit economics.

Never ask anyone to be your lead investor - Hi, I'm David G. Cohen

The article argues that entrepreneurs should never ask investors to be their lead investor when fundraising. Instead, they should ask investors to commit to investing, as this builds momentum and can lead to oversubscription and more competitive terms. The author explains that large venture capital firms will naturally want to lead if they're interested, while smaller investors may not have the credibility or resources to be a lead investor. Asking investors to be a lead investor can create unnecessary friction and stall momentum. The article also provides guidance on how to handle investors who say they'll commit only after a lead investor is secured, suggesting that entrepreneurs ask if they'll commit assuming there's a lead investor before closing.

Key Takeaways

Asking investors to commit to investing rather than being a lead investor can build momentum and lead to better fundraising outcomes.
Entrepreneurs should not ask smaller investors to be lead investors as it creates unnecessary friction and risk for them.
Having terms is different from having a lead investor; entrepreneurs can establish terms once they have momentum and multiple commitments.

10 Venture Capital Blogs You Should Read

The article lists the top 10 venture capital blogs that provide valuable insights into the startup ecosystem, venture capital trends, and industry developments. The blogs are written by experienced venture capitalists, entrepreneurs, and industry experts, offering practical advice and perspectives on startup growth, investment strategies, and technological advancements. The featured blogs include 'Both Sides of the Table' by Mark Suster, 'Feld Thoughts' by Brad Feld, and 'Paul Graham's Essays', among others. These blogs cover a wide range of topics, from valuation trends and startup profitability to the future of venture capital and industry-specific insights.

Key Takeaways

The top VC blogs offer insider perspectives and industry insights that can give startups an information advantage in the competitive venture capital landscape.
Following these blogs can help entrepreneurs and investors stay informed about the latest trends and developments in the startup ecosystem.
The featured blogs provide practical advice on startup growth, investment strategies, and navigating the venture capital world, making them valuable resources for both founders and investors.

Thread by @AcquiredFM on Thread Reader App – Thread Reader App

The document outlines key strategies for startup fundraising, emphasizing the importance of being 'pre-empted' by investors rather than actively seeking them out. Rahul, a successful founder, advises maintaining a state of 'not raising' by making progress on the company while being open to investment opportunities. Having a strong BATNA (Best Alternative to a Negotiated Agreement) and sufficient runway are crucial for negotiating better deals. The document also highlights the importance of raising funds ahead of traction, having a clear growth path, and creating market momentum. It suggests that founders should be willing to walk away from deals and have institutional buy-in to attract key hires. Additionally, it recommends raising from other founders and operators in early stages and leveraging their networks to build momentum.

Key Takeaways

Startups should aim to be 'pre-empted' by investors by making steady progress and maintaining a casual stance towards fundraising.
Having a strong BATNA and sufficient runway is crucial for negotiating better deals and avoiding being dictated by market conditions.
Founders should raise funds one round ahead of their current traction to maintain a position of strength and create market momentum.

The Handshake Deal Protocol | Y Combinator

The document discusses the concept of 'handshake deals' in Silicon Valley's startup ecosystem, where verbal commitments are made before formal transactions occur. It highlights the problems associated with handshake deals, such as misunderstandings and dishonest behavior, and proposes a standard protocol to clarify and formalize these agreements. The protocol involves a three-step process: the investor says 'I'm in,' the startup sends a message confirming the offer details, and the investor replies with a yes. This creates a clear audit trail and prevents ambiguity by requiring specific terms, such as amount, valuation or cap, and discount. The protocol aims to prevent investors from making vague commitments and to protect startups from misleading or false promises. It also addresses issues like conditional offers and investment ranges, suggesting that startups treat these as separate offers. The protocol is designed to be used within Y Combinator and potentially spread to the broader startup community.

Key Takeaways

The proposed handshake deal protocol provides a clear, three-step process to formalize verbal commitments between startups and investors, reducing misunderstandings and dishonest behavior.
By requiring specific terms like amount, valuation or cap, and discount, the protocol eliminates ambiguity and ensures both parties are on the same page.
The protocol's emphasis on creating an audit trail helps to identify fault in case of a deal falling through, discouraging investors from making misleading commitments and preventing startups from misinterpreting investor interest.

How to create an effective pitch deck: A data-driven analysis of what makes successful slides – GeekWire

This article presents a data-driven analysis of successful pitch decks from Series A companies, highlighting key elements such as problem statement, market size, solution, traction, competition, go-to-market strategy, growth projections, team, and the ask. The study, conducted by Silicon Valley Bank and Voyager Capital, analyzed pitch decks from diverse geographies, industries, and founder experience levels. Key findings include the importance of a clear and concise problem statement, contextualizing market size, showcasing traction through quantifiable metrics and customer profiles, and demonstrating a deep understanding of the competitive landscape. The article also provides insights from Randall Lucas of Voyager Capital on what makes a pitch deck effective, including the need to focus on pain points, demonstrate sustainable competitive advantage, and provide a clear ask with expected milestones and metrics.

Key Takeaways

A successful pitch deck should strike a balance between providing essential information and avoiding unnecessary detail, with a focus on key elements such as problem statement, market size, solution, traction, and competition.
The study highlights the importance of contextualizing market size and demonstrating a deep understanding of the competitive landscape to establish credibility with investors.
Founders should prioritize showcasing traction through a combination of quantifiable metrics and customer profiles, and demonstrate a clear understanding of their go-to-market strategy and growth projections.

60 Best Pitch Deck Examples in 2025 (YC, Templates & More) | Superside

The document provides an analysis of 60 successful pitch deck examples from startups that have secured funding, including those presented at Y Combinator and 500 Startups. It highlights key elements that make a pitch deck effective, such as clear and concise writing, strong design, and storytelling. The document also discusses the importance of tailoring the pitch to the audience, focusing on visual appeal, and practicing the presentation. Additionally, it showcases various pitch deck AI generators and provides tips for creating a compelling pitch deck, including using a 10-slide formula, consistent branding, and highlighting financial projections and market opportunity. The document concludes by emphasizing the importance of precision and effort in creating a successful pitch deck.

Key Takeaways

A successful pitch deck requires a combination of clear writing, strong design, and effective storytelling to capture investors' attention.
Tailoring the pitch to the target audience and focusing on visual appeal are crucial elements in creating a compelling pitch deck.
The use of AI-powered pitch deck generators can streamline the creation process, but human creativity and expertise are still essential in crafting a winning pitch deck.

Startup pitch decks of 29 companies before they became billion-dollar companies | CB Insights Research

The document provides access to early pitch decks from 29 startups that became billion-dollar companies, including Airbnb, Coinbase, and Uber. It highlights the importance of pitch decks in securing funding and features decks from various successful startups, detailing their initial visions, funding rounds, and eventual valuations. The document is part of CB Insights' research and analysis on startup success stories and venture capital trends.

Key Takeaways

The pitch decks of successful startups like Airbnb and Coinbase provide valuable insights into their initial strategies and visions.
Securing funding through pitch decks was a crucial step for these startups in achieving billion-dollar valuations.
The document showcases the diversity of industries and business models among the featured startups, from ride-hailing to digital health insurance.

37 Legendary Pitch Decks | Best Startup Pitch Deck Examples

This document analyzes 37 successful pitch decks from well-known startups, providing insights into their structure, key elements, and strategies for securing funding. It highlights the importance of a clear problem-solution narrative, effective use of data, and showcasing traction and growth. The document also offers practical advice for creating a compelling pitch deck, including the use of simple language, visual storytelling, and highlighting the unique value proposition. Additionally, it provides access to 10 editable pitch deck templates for users to create their own presentations.

Key Takeaways

A strong pitch deck should start with a clear vision and problem statement, followed by a concise solution and market opportunity.
Using data and traction metrics effectively can significantly enhance the credibility of a pitch.
Visual storytelling and simple, clear language are crucial for making a pitch deck engaging and understandable.
Highlighting the unique value proposition and differentiating from competitors is essential for capturing investor interest.
Including a team slide can help establish credibility and demonstrate the capability to execute the business plan.

Thread by @eriktorenberg: My favorite tips on how to raise a seed round Paraphrasing Paul Graham: Pretend you are a venture capitalist, that you have their incentives…

The document is a collection of tweets from Erik Torenberg discussing various topics including what it means to be human in the age of AI, the insurance industry's massive $2T opportunity, challenges in lending businesses within fin-tech, common mistakes startups make, and the trend of self-funding businesses. It highlights the ability to contribute to the knowledge loop as a key aspect of humanity and questions what makes humans special when AI can also contribute. The insurance industry is noted for its poor customer experience despite the internet's potential to improve it. The document also touches on the difficulties of lending, the importance of choosing the right co-founders for startups, and the benefits of self-funding businesses.

Key Takeaways

The document highlights the need for the insurance industry to improve its customer experience, given that 75% of people start their insurance process online but only 25% finish it, indicating a significant gap in the quality of online services.
The ability to contribute to the 'knowledge loop' (learn, create, share) is presented as a key aspect of humanity, raising questions about human uniqueness in the face of AI advancements.
Startups can benefit from self-funding as it allows for a more controlled growth trajectory, avoiding the pressures associated with raising angel or VC money.
Choosing the right co-founders is crucial for startups, as being value-aligned and having mutual respect can overcome other differences.
The lending business within fin-tech is challenging due to its cyclical nature and the difficulty in determining who to lend to, making it a potentially risky venture.

How to raise money before launch. An analogy we use at KV is that… | by Delian Asparouhov | Medium

The article discusses the importance of a well-crafted seed deck for startups seeking pre-launch funding from venture capitalists. It highlights key elements of successful seed decks, including a clear value proposition, a compelling story, and a detailed explanation of the business model, risks, and team. The author, Delian Asparouhov, shares insights from his experience at Khosla Ventures, where he has funded companies like Opendoor, Forward Health, and IndigoFair before they launched their products. He emphasizes the need for a concise and persuasive narrative that showcases the startup's vision, problem-solving capabilities, and competitive advantage. The article provides examples from successful seed decks and offers guidance on how to structure a deck that can convince investors to provide early-stage funding.

Key Takeaways

A well-structured seed deck is crucial for pre-launch fundraising, as it provides investors with a clear understanding of the startup's vision and potential.
The deck should tell a compelling story that highlights the problem being solved, the solution, and the team's unique advantage in addressing the challenge.
Investors look for a clear value proposition, a viable business model, and a thorough assessment of risks and potential outcomes when evaluating seed-stage startups.

Th e Rules of Engagement for Pre-Seed Startups

The pre-seed funding round has become a critical gateway for startups to secure venture capital investment. According to the DocSend Startup Index, which analyzed data from 174 pre-seed startups in 2019, investor expectations have shifted significantly. Startups are now required to demonstrate product readiness, a clear business model, and a well-thought-out pitch deck. The average pre-seed funding amount in the U.S. is around $500,000, with investors spending an average of 3:21 minutes on pitch decks. Successful startups typically have a clear product, a well-defined market size, and a strong team. The data also reveals biases in VC investment, with teams of 2-3 founders, male or mixed-gender teams, and teams in their 30s or 50s being more successful. Regional variations also exist, with West Coast startups raising more funds on average. The analysis highlights the importance of narrative flow, pitch deck order, and a clear 'Why Now?' slide in securing funding.

Key Takeaways

The pre-seed funding landscape is becoming increasingly formalized, with investors expecting more product readiness and a clear business model from startups.
There are significant biases in VC investment, with certain demographics and team compositions being more successful than others.
A well-crafted pitch deck with a clear narrative flow and a 'Why Now?' slide is crucial in securing pre-seed funding, with investors spending an average of 3:21 minutes on successful decks.

Frequently Asked Questions

How do the specific elements of successful pitch decks (like the 'Why Now?' slide appearing 16% more in successful decks) correlate with the handshake deal protocol requirements, and could combining these frameworks create a more systematic fundraising approach?
What is the relationship between the 'pre-empted fundraising' strategy described in the Acquired thread and the DocSend data showing that 51% of successful pre-seed companies take longer than 16 weeks to fundraise?
How do the LOI gotchas (particularly around valuation basis and earnouts) connect to the early-stage fundraising advice about building momentum and avoiding lead investor dependencies?
What patterns emerge when comparing the marketplace startup strategies (chicken-and-egg problem solving) with the B2B GTM approaches, and how might these inform fundraising narratives?
How do the demographic biases revealed in the DocSend pre-seed data (age, gender, location) relate to the advice about team composition and founder-market fit across the other documents?
What is the connection between the 'Build a Team that Ships' philosophy and the fundraising advice about demonstrating product readiness rather than just presenting ideas?
How do the specific pitch deck elements that investors spend the most time on (product slides, business model) align with the go-to-market strategies outlined in the B2B GTM document?
What insights can be drawn from comparing the early pitch decks of billion-dollar companies with the current expectations for pre-seed rounds as outlined in the DocSend research?