Nicole DeTommaso’s Post

Understanding "The Pie": How #Startup Funding Works This striking infographic perfectly illustrates the journey of a startup, from a founder's idea to a multi-billion #dollar #IPO, focusing on the crucial #element of #equity. Many new founders wrestle with the #concept of #dilution, but this #graphic makes it clear: 100% of nothing is a lot less than 17% of a big #company. Here are a few key takeaways from the "Splitting the Pie" journey: The Co-Founder Split: It all begins here. The equity split between co-founders (often 50/50, as shown) is the first and most critical decision. Early Investors are Key: The Friends & Family round and the Seed Round (involving Angel Investors) are where the first outside capital comes in. This is also where the option pool (equity set aside for future employees) is introduced, slightly diluting the founders' stakes. The #VC Impact: The #Venture #Capital (VC) #stage typically involves the biggest jump in valuation and the largest initial dilution for founders, but it's essential for rapid scaling. Notice how the pie grows in size (#valuation) while the #founders' slice shrinks in #percentage—but the absolute #value of that slice grows immensely. The IPO Payoff: By the time a company reaches a $2.6 billion valuation and an Initial Public Offering (IPO), the founders, early employees, and investors all share a piece of the public company. A founder who started with 100% may end up with ∼17% equity, but their financial outcome is fundamentally transformed. It’s a powerful visual reminder that as a #founder, you're not just #raising #money; you're #selling a percentage of your company to build value for everyone involved. What's your biggest lesson learned about #equity and #dilution? Share your thoughts below! 👇 #StartupFunding #VentureCapital #EquityDilution #Founders #IPO #Entrepreneurship #StartupJourney

How Startup Funding Really Works Building a startup is a journey of turning ideas into scale and along the way, every funding round reshapes who owns what. Here’s the reality: owning 100% of nothing is far less valuable than owning a smaller slice of a successful company. From the first co-founder discussions to friends & family support, angel investors, VCs, employees with stock options, and eventually the IPO each stage brings in new stakeholders. The founder’s share shrinks, but ideally the company’s value multiplies. A few takeaways: Early dilution feels tough, but it fuels growth. Smart investors add more than money they bring networks, credibility, and acceleration. Employees who take stock options are betting on your vision and building it with you. By IPO, founders may hold “only” ~15–20%, but that small share of a billion-dollar company is life-changing. The big lesson: It’s not about holding equity tightly, it’s about growing the pie so everyone benefits. Founders and investors here what stage do you think is the toughest to raise funding, and why? #Startups #Funding #Entrepreneurship #VentureCapital #IPO

Is securing venture capital the only path to startup success? Many founders hit a wall trying to raise VC, but the journey doesn't have to end there. True entrepreneurial grit often shines brightest when you pivot your funding strategy. It's about resourcefulness, not just initial capital. Explore creative debt financing. Leverage strategic partnerships for growth. Focus relentlessly on early revenue generation. We've seen countless resilient founders build thriving businesses by looking beyond traditional VC. Sometimes, the most innovative funding solution comes from unexpected places. This article dives into practical tactics for navigating growth without always relying on venture capital. What alternative funding strategies have you found most effective for scaling a business? #StartupFunding #Entrepreneurship #BusinessGrowth #VentureCapital #SmallBusiness

Term Sheet Teardown (Part 2): Liquidation Preference Who gets paid first when a startup exits? It all comes down to one crucial detail: whether the liquidation preference is participating or non-participating. ✅ 1x Non-Participating (Market Standard) The Investor decides between: 1️⃣ Getting their investment back; or 2️⃣ Receiving their ownership percentage of the total sale price with everyone else. They choose the better financial outcome but can't have both. ❌ Participating (Red Flag) This is the double-dip, the investor gets: 1️⃣ Their investment back... AND 2️⃣ Their ownership percentage of all remaining proceeds. This is not founder-friendly and can severely reduce the payout for founders and employees. The Bottom Line: The difference between "non-participating" and "participating" is the difference between a fair deal and a problematic one. Always push for 1x non-participating in your term sheet. #VentureCapital #Startups #TermSheet

💡 Why VC Investors Aren’t Always Ideal for Early-Stage Startups — and Why Angels Fit Better Not all funding is created equal. Many founders rush to approach Venture Capitalists (VCs) too soon — but at the early stage, that can often do more harm than good. Here’s why 👇 🔹 VC Investors Usually invest after product-market fit is visible Expect traction, metrics, and scalability from day one Push for aggressive growth and structured reporting Can lead to founder dilution and pressure too early 🔹 Angel Investors Invest based on vision, team, and potential, not just numbers Offer mentorship, network, and patience Provide flexibility and emotional backing in early chaos Help startups build a foundation before VC rounds ✅ Bottom Line: VCs are powerful growth partners — but only after you’ve proven your early concept. At the start, Angel Investors give you the space, trust, and guidance to shape your story. #StartupFunding #AngelInvestors #VentureCapital #Entrepreneurship #Fundraising #StartupGrowth

The data would suggest that VCs really do love repeat founders. More than 50% of Seed + Series A capital went to repeat founders, per Carta.

I recommend founders reading this great article on board control by Alex Iskold, the founder of 2048 Ventures. Here are 3 key takeaways: 1. Understand how board control works, understand key terms in the term sheet (link in the document). 2. Have more founder seats, don’t give up board seats easily (especially in pre-seed and seed stage). 3. Choose your investors wisely, raise fewer rounds, do your reverse due diligence on your investors. Board control is as important as dilution. Good investors should not take advantage of the founders, but rather help them succeed in a win-win situation. #startup #vc #board #control

Founders who raise "just enough" always come back for more. Same story. Weaker position. Less leverage. I see this pattern repeatedly - founders think small rounds preserve equity, but they actually preserve dependency. The reality? Under-raising makes startups fragile, not efficient. When investors see founders back in market after 6 months, they don't see momentum. They see miscalculation. Here's the framework smart founders use: - Execution capital: 12-18 months of growth milestones - Buffer: Room for delays, pivots, cost variance   - Next-round prep: Raise from strength, not desperation Properly capitalized startups attract validation. Underfunded ones chase it. The most expensive dilution isn't what you give up - it's what desperation costs you later. At Brookstone & Partners, we help high-growth founders raise capital through strategic positioning, sharp execution, and warm introductions to the right investors. We specialize in venture-scale raises across AI, SaaS, and tech-enabled businesses. DM us - We're already speaking with your next partner. #capitalraising #startupfunding #venturecapital #fundraising #startups #founders #investors #duediligence #brookstoneandpartners #funding #strategy #Founders #founders #startup #growth

Mutual benefit is alignment that compounds value. Great founders create momentum. The right investor should help it accelerate. Before we invest, we ask three questions: •Do the company’s priorities match the support we uniquely provide? •Which tangible contributions from us will change the trajectory in the next twelve to twenty-four months? •Will our involvement open doors and accelerate momentum in capital formation, commercialization, and network reach? When alignment is real, momentum compounds. Trust deepens. Progress scales in a way that lasts. We wrote about how this shapes our underwriting and shows up in the companies we support. https://lnkd.in/eNNUcV_V #venturecapital #founders #startups

What does it take to turn a concept into a venture-backed company—before there’s even a product? This week, we sit down with Olivia O'Sullivan, Partner & COO at Forum Ventures, to talk about the zero-to-one journey. From killing ideas quickly to validating with paying customers, Olivia shares how Forum Ventures helps founders go to market faster and raise smarter. We cover: ✨ Forum’s 3-track model—studio, accelerator, and seed fund ✨ Why signed customer contracts matter more than code ✨ How technical founders can master sales & fundraising ✨ What “platform” really means inside a VC firm ✨ The red flags and false signals every founder should avoid Listen in for a candid conversation about founder-market fit, execution signals, and what it really takes to build from day zero. #MarginforError #HelloAdvisr #VentureCapital #Startups #B2B #SaaS #Entrepreneurship #Founders #SeedStage #PreSeed #ZeroToOne #GoToMarket