Weekly 🔥 26: How to raise funds for your startup in 2023
Welcome to another edition of our newsletter! You’ll receive practical startup advice straight to your inbox every week.
In this week’s edition, we discuss
- How to find funding for your startup as valuations and terms return to pre-bubble norms
- The top-rated business books of 2022
Let’s do this.
Raising funds in 2023 — a crash back to reality
If you were planning on raising funds in 2023, DC Palter has some harsh advice — forget about the valuations that friends and cohort members were getting in 2018–2022. The bubble is over and we’re back to fundamentals. Investors are back to expecting the terms we saw in the old days of pre-2018.
If you want to bring in investors, you’ll need to offer:
- An attractive valuation or valuation cap. No uncapped notes or SAFEs.
- A real board, including a board seat for the lead investor, and perhaps a board observer role for a second large investor.
- Liquidation preferences of 1x or higher.
- If major milestones are being promised in the near future, warrants are required to adjust the valuation down if the goals are not met.
- Warrants for earlier investors in the round to provide an incentive not to wait.
- A plan to do more with less, including lower salaries and hiring far fewer staff.
👉 Go deeper here: How to Fund Your Startup in 2023
📚 ICYMI: The top-rated business books of 2022 📚
2022 wasn’t the kindest year for entrepreneurs, with spiralling inflation, interest rate rising and the crypto world imploding. It spooked investors, and the landscape moving forward is uncertain.
Yet it’s been a year with many amazing books published. As is yearly tradition, our podcast host Amardeep Parmar is back with his top-rated business book list. And like always, the list is based on reviews rather than his personal opinion.
If you’re seeking inspiration and guidance for the year ahead, this is the list for you.
Dive into the list: The 20 Top-Rated Business Books of 2022
Sweet Tweets
Till next week,
Team EH
