Once your startup is ready to seek investment from professional investors, your fundraising checklist should include obtaining the right legal documents. Understanding the purpose of each of these documents and the reasons why they're important will help set you up for success when it comes time to secure funding.
Startups now have access to a new form of non-dilutive capital. The research and development (R&D) tax credit was established in the early 1980s as an incentive to stimulate growth in the US economy. But due to the fact it was an income tax credit, it saw little use by pre-revenue startups.
In order to run and grow a high-growth startup, most founders eventually reach the point where they will have to raise funding from outside investors. This process can be long and grueling, feeling like a never ending cycle of approaching an investor, receiving feedback illustrating why the startup isn’t ready for investment, and then trying to act on the feedback before talking to the next investor. We built a tool to help shorten the cycle.
Startups are all about risk, so startup investment is based on identifying the startups which are successfully making themselves less risky over time. One of the most common (and investor-friendly) ways to derisk your startup is to build a diverse, well-rounded support network that can act as a major asset to your venture—aside from investors, these will mostly be your board of directors and your startup’s advisors.
In December of last year, Congress passed the largest tax bill since 1986. The wide-ranging changes affect everything from personal income taxes to pass-through entities and corporate taxes. Since taxes are a critical consideration for every business venture, it’s important for founders to understand how these changes may impact high growth startups.