Fundraising

Fundraising — The Operating System for an Equity Round

Own the round as a PROCESS: size it, pick the instrument, build a tiered list around intro paths, run a concentrated sprint, read the term sheet.

This skill thinks in funnels (how many investors at the top to land N term sheets), in instruments (post-money SAFE vs priced Series Seed), and in leverage (warm intros, parallel meetings, a first term sheet that creates real urgency). It consumes the deck, the model, and the collateral that siblings produce, and orchestrates them into a closed round. Scope: pre-seed through Series A priced rounds and SAFE rounds, founder-side.

What this owns vs what routes out

Fundraising owns the decisions and the sequence. The moment the real ask is a document or the numbers behind it, route out — do not half-build the sibling's artifact here.

A general sales pipeline for CUSTOMERS (not investors) is ../sales-pipeline/SKILL.md, not this skill.

Intake gate — answer these before planning anything

This is a real branch: if the answer to the last row is "the deck" or "the model," STOP and route. Do not produce a round plan on top of unknowns.

• Stage & traction — pre-seed/seed/A? Pre-revenue, or MRR + growth rate (e.g. "$12K MRR, +18% MoM")?
• Milestone the money buys — what does this round let you prove (e.g. "$100K MRR," "10 design partners → repeatable sales")? If you can't name it, you can't size the round.
• Runway you need to buy — months to that milestone × monthly burn = the floor of the raise.
• Lead in hand? — is a lead investor already circling, or is this a cold start? This flips the instrument and the sprint plan.
• Network reality — strong warm-intro paths, or a weak network? This decides whether you lean on accelerators / portfolio founders.
• Collateral ready? — deck, model, and data room exist? If the real request is "build the deck" → ../pitch-deck/SKILL.md. If it's "build the model" → ../financial-model/SKILL.md. Come back with strategy once they exist.

Step 1 — Size the round to a milestone

The amount is burn to the next fundable milestone + buffer, never "the maximum we can get." Raising too much sells too much of the company for proof you haven't generated yet; raising too little strands you between milestones.

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Amount  = months_to_milestone × monthly_burn × (1 + buffer)   # buffer ~25–35%
Dilution target:  pre-seed 10–15%   ·   seed 15–25%
Cap / pre-money ≈ amount ÷ dilution_target

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Bad  — "Let's raise as much as we can — $4M sounds good."
Good — "$1.5M buys 18 months to $100K MRR at our $80K/mo burn.
        Aim for ~15% dilution → ~$10M post-money SAFE cap."

2026 reference bands (ground your ask, don't quote them as gospel): median seed ~$3.1M at ~$16M pre-money; pre-seed SAFE caps commonly $10–15M for $250K–$2M raised. Seed deal volume fell ~28% YoY — fewer rounds close but larger, so targeting quality beats spray. Hand the actual cap-table dilution arithmetic to ../financial-model/SKILL.md; you set the target band, it computes the table.

Step 2 — Pick the instrument (don't default)

Make the SAFE-vs-priced call explicit. Below ~$4M with no lead, a post-money SAFE with a valuation cap is the standard; above that, or with a complex cap table or a lead who wants control terms, expect a priced equity round with preferred stock. ~90% of pre-seed rounds on Carta in Q1 2025 used a SAFE; ~92% of all pre-priced rounds as of Q3 2025.

Two traps to flag every time:

1. Post-money SAFE pile-up. A post-money SAFE fixes the holder's ownership after all SAFE money but before the priced round, so stacking multiple post-money SAFEs dilutes founders more than they expect. Compute combined dilution across the whole stack before signing the next one — hand the real math to ../financial-model/SKILL.md. Most post-money SAFEs are cap-only (no discount); add a discount only if there's a reason.
2. Over-engineering a priced round too early. A $15–25k priced round before you have traction or a lead burns cash and weeks for governance you don't need yet. Default small/early rounds to SAFE.

SAFE-vs-priced decision table with cost/speed/dilution columns and a worked pile-up example → references/process-playbook.md.

Step 3 — Build the target list, tiered by intro path

The funnel is brutal and quantifiable, so build the list backward from term sheets, keyed to how you'll get in the door — not a flat list of names.

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Work backward:
  want ~2–3 term sheets
  first→second meeting ~50%, outreach→meeting ~15%
  ⇒ ~50–100+ qualified, warmth-weighted targets at the top of the funnel

The intro path is the single biggest lever: a warm intro converts to a meeting ~30–50%; cold outreach replies ~1–3% and yields <2% meetings (≈10–20x cold). So rank every target by the warmest path you have to it:

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Warm-intro priority ladder (best → last resort)
  1. Existing investors / angels who can route you in
  2. Portfolio founders of the target VC (they get read)
  3. Mutual advisors / operators / accelerator network
  4. Cold outreach — last resort, only where no path exists

Tier A/B/C by fit × intro warmth (A = perfect-stage, perfect-thesis, warm path). If your network is weak, manufacture paths: accelerator demo days, portfolio-founder intros, scout programs.

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Bad  — One flat list of 200 VC names, same blast to all.
Good — 60 targets, each row tagged: stage fit · thesis fit · tier · warmest
        intro path · who makes the intro. Cold is a labeled minority.

The full back-solve arithmetic, per-path conversion bands, the A/B/C rubric, the pipeline stage schema, and a worked $3M-seed example → references/funnel-math.md. When there's genuinely no warm path to a Tier-A target, the message copy itself is ../cold-outreach/SKILL.md.

Step 4 — Run it as a concentrated sprint, not a trickle

Momentum is manufactured by simultaneity, not by sending one email and waiting. Concentrate 30–50 first meetings in the first ~2 weeks of launch, run them in parallel, and aim for a first term sheet inside ~2 weeks. Total process targets ~6–8 weeks — though the tighter 2025 market stretched full cycles to 12–18 months when momentum was absent.

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Sprint shape
  Pre-launch    line up intros, finalize deck/model/data-room, batch meetings
  Weeks 1–2     30–50 first meetings IN PARALLEL — this is what creates competition
  Weeks 3–4     partner meetings, diligence, drive toward the first term sheet
  Close         first term sheet → use it to compress the rest → sign

The first term sheet changes everything — it converts soft interest into urgency across the whole pipeline. Use it. But the honesty rule is absolute, because it is the one mistake with no recovery: manufacture FOMO from a visibly busy calendar and a real first term sheet — never from fabricated competing offers or invented deadlines. Lying about a term sheet you don't have is how a raise dies when one investor calls another; the cost of getting caught is the round.

Track count-in-pipeline and stage conversion, not activity. Benchmarks to instrument the funnel: outreach→meeting ~15%, first→second ~50%. Pipeline stages: Sourced → Intro requested → First meeting → Partner/2nd → Diligence → Term sheet → Closed. Week-by-week playbook and the honest-momentum mechanics → references/process-playbook.md.

Step 5 — Read the term sheet (the basics, then hand off)

A founder negotiates the few terms that compound — not the headline valuation alone. Know the 2025 market-standard bands so you know what to accept and what to push on.

Median seed lead ownership runs ~12.6%. Don't sign the first term sheet without a comparison — a single offer with no comp gives away your only leverage. And the hard handoff: the term sheet is mostly non-binding, but the binding SAFE / SPA / side letter is a legal document → ../contracts/SKILL.md and a real lawyer. You read the term sheet to negotiate; you do not draft the binding instrument here. Full term-by-term cheat sheet with bands and push-on guidance → references/process-playbook.md.

Anti-patterns