Top Resources for Understanding Startup Funding


It’s no secret that many activist investors are frustrated with the lack of financial literacy among entrepreneurs today.  In my own battle against the blank face in the boardroom, I’ve been following the work of Brad FeldJason Mendelson and Fred Wilson (in addition to asking some of our great investors questions directly).



While helpful, some of these online works can be a little overwhelming, such as Fred Wilson’s MBA Mondays, which consists of over 90 posts.  Here are a few places to get started — followed by some additional resources I’ve found useful.

Brad Feld’s Finance Fridays

Brad’s professorial writing style explains the context around numerous accounting mechanisms and why they matter. Brad will get you thinking about the big picture before you dive into the vocabulary.

Select Picks:

Setting up Your Accounting SystemAn Overview of the Balance Sheet and Statement of Cash FlowsFinancial Statements (examples, annotated)Revenue Projections (and why to make them)
Jason Mendelson’s Convertible Debt Series

Convertible debt (and convertible equity) is popular for seed-stage companies in Silicon Valley.  Jason’s series will help you get comfortable with the levers behind most seed-stage negotiations.

Select Picks:

Conversion MechanicsConversion in a Sale of the CompanyMiscellaneous TermsWarrantsEarly vs. Late-Stage DynamicsBrad Feld’s Term Sheet Tips

Don’t forget to plan for success!  Get familiar with what a term sheet looks like before you get one.

Select Picks:

Revisiting the Term Sheet (vocabulary)Stock Option Vesting Calculator >> Direct linkFred Wilson’s MBA Mondays

Fred’s posts are among my favorite.  Not only does he share concrete examples, but he also uses simple terms to get you familiar with almost every major financial metric that will have an impact on your business.  I even printed Fred’s posts and annotated them rigorously until I understood how everything fit together.

Select Picks:

The Profit and Loss StatementUnderstanding the Balance SheetUnderstanding Cash FlowAnalyzing Financial StatementsEBITDA

Additional Resources:

Ask The VC: Resources (model documents and standard forms)TechStars: Open Sourced Model Seed Financing DocumentsFeldThoughts: Entrepreneurs Blogging About Term Sheets

Reprinted by permission.  This post originally appeared on the author’s blog.

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About the author: Tyler Arnold

Tyler Arnold is co-founder and CEO of SimplySocial Inc., a software tool that helps large companies create great content for their social media profiles.  As CEO, Tyler assists with key accounts, business development and talent acquisitions as SimplySocial grows its presence around the world.

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