Venture Capital Funding
Venture capital is private financing provided by professional investors (VC firms or angels) to early-stage, high-growth startups in exchange for equity (ownership). VCs invest because they expect the company to scale quickly and deliver a big return later (acquisition or IPO).
HowVenture Capital Funding funding works
Idea → traction
Build a product/prototype and get early evidence that customers want it (users, revenue, pilots).
Prepare fundraising materials
Pitch deck (10–15 slides), one-page executive summary, financial model, and a clean cap table.
Find investors / get introductions
Reach out to angel investors, seed funds, or VC firms that invest in your stage and sector.
Initial meetings / pitch
Present your deck; investors ask high-level questions about market, team, traction, and unit economics.
Term sheet (non-binding offer)
If interested, an investor issues a term sheet outlining investment amount, pre-money valuation, % ownership, type of shares, and key terms (vesting, board seats, liquidation preference).
Negotiation
You and the investor negotiate valuation and terms. Get a lawyer involved.
Due diligence
Investors verify claims: legal, financials, IP, customer references, team backgrounds. This can take days to months.
Definitive documents & close
Sign stock purchase agreement and other legal documents. Funds transfer and new shares issued.
Post-investment partnership
Investor may take board seat, help hire, open customers, advise strategy, and support future rounds.
Scale → next rounds or exit
Raise Series A/B/C as needed, or aim for acquisition/IPO as the company grows.
Quick checklist for founders ready to raise
Clean cap table and legal structure.
Clear 10–15 slide pitch deck (problem, solution, team, traction, market size, business model, financials, ask).
12–24 month financial plan / use of funds.
References (early customers, advisors).
Lawyer experienced in startup financings.
How Venture Capital Funding firms evaluate startups (their internal steps)
Sourcing — scout markets and founders.
Screening — quick review of deck and metrics.
First meeting / diligence — deeper discussions and initial checks.
Partner meeting / investment committee — decide to offer term sheet.
Due diligence & legal — validate business and finalize terms.
Closing & portfolio management — monitor progress, help scale, plan exit.
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