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Early-Stage Startups Need Friends, Family, and Fools

Startup Professionals Musings

Since they don’t know you (yet), their first integrity check on you as a person is whether your friends and family believe in you strongly enough to give you seed money for your new idea. We can all recount horror stories of families and friendships torn apart by money lost on someone else’s speculative dream. Don’t be one.

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The Legal Side of Entrepreneurship

YoungUpstarts

by John Vrionis, partner at Lightspeed Venture Partners. Startups need to understand how to manage the seed money they receive from investors and VCs. John Vrionis ( @jvrionis ) is a partner at Lightspeed Venture Partners who focuses primarily on early stage enterprise and consumer technology investments.

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8 Key Actions for Entrepreneurs Needing Early Money

Startup Professionals Musings

Since they don’t know you (yet), their first integrity check on you as a person is whether your friends and family believe in you strongly enough to give you seed money for your new idea. We can all recount horror stories of families and friendships torn apart by money lost on someone else’s speculative dream. Don’t be one.

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A Year in Review: 2016

Version One Ventures

At the same time, seed money is still abundant due to the proliferation of micro VC over the past few years. This can set up a perfect storm if early-stage companies don’t manage their expectations and reality properly. Mattermark (a portfolio company) looked at the matriculation rates for a class of startups.

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Timing: When to raise seed funding.

Scalable Startup

High growth startup companies need seed money to get things going. They need the money to rent offices, hire staff, and establish their initial presence (website, incorporation, marketing). At this stage you’re essentially selling yourself and your cofounders. Without funding most tech startups will die.

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Understanding the Risks of VC Signaling

Both Sides of the Table

Chris Dixon provided some commentary on Twitter that he believes I missed “the most important point about fund size.&# He’s specifically referring to his point of view that entrepreneurs shouldn’t take seed money from “big VC’s&# (he defines them as > $100 million). And then there is GRP Partners.

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To Fundraise While You're Not Fundraising or to Not Fundraise While You're Not Fundraising? That is the Question.

This is going to be BIG.

First, in the early stages, there's a lot more information that can be gleaned about you than we can know for sure about the success of your company. You think you're getting this big fat check compared to the seed money you raised, but they're actually doing something more like dipping their toes in the water.