Funding and exits

Hanan started Webrepublic in 2009 during the Swiss financial crisis in a saturated agency market. His pre-IPO Google years gave him the product focus and credibility, but the mechanics that made it work were low personal burn, treating forgone salary as his investment, and never being pre-revenue.

DD is a sample check, so you accept risk by design. Also expect a backlog of postponed decisions: sellers defer everything, so you may inherit 15 people waiting for promotions on day one.

Chong says founders use VCs well for customer introductions and fundraising momentum, but leave strategic pattern knowledge on the table. Partners at large platforms see a huge share of European and US growth companies and can benchmark competitors, pipelines, and candidates; few founders ever ask.

Patent filings consume years for a moat that often does not matter in software; in biotech and devices they are essential. Cap table and structure optimization can wait until the asset is proven to be worth something.

The top new-angel mistakes he sees: jumping in too quickly, writing two big checks before knowing what you want, then lacking liquidity to double down. His own first investment worked out (sold after 18 months) but was, in his words, naive and lucky. If you cannot help beyond money in a domain, you are just an investor, not an angel, and can neither maximize upside nor limit downside.

Goal: end with three term sheets on the table so you choose from strength. Parallel timing creates momentum and genuine FOMO since VCs talk to each other, and keeps you in pitching energy. Budget six months from starting prep to money in the bank.

Behind identical VC websites sit very different humans with different goals. Build a few genuine relationships and pick who you take money from and why, rather than optimizing a spreadsheet of term sheets.

YC decides on half a million dollars in 10 minutes and interviewers interrupt constantly. David used a flashcard site (IPG) for YC-type questions and Zurich-area YC founders as mock interrogators. To meet YC founders: YC's European events and hubs like Zurich's Student Project House.

You can defer transfer-pricing risk, employee tax risk, and control cleanup, but these are nearly impossible to fix while negotiating an investment round or after tax authorities have already ruled against you. Spend the money and lawyer hours up front.

Small expenses accumulate invisibly over years. You do not know whether anyone uses a service until it stops working, so the outage is the audit.

Martinez had not realized his supply relationships doubled as exit options until a tough fundraising market forced the search. Combined with the classic lesson: be exit-ready from day one, because the interest is broader than founders assume.

Most founders skip this because they feel grateful the money is coming in. Founders are normally very open about their investors in one-on-ones, so the information is available for the asking.

Board members can read; discussing strategic topics and initiatives is the value of the meeting. Herzog also recommends splitting separate reporting calls from quarterly strategy meetings. Nothing is more annoying than 100 pages of documents delivered the night before.

Board work is relationship management. Sharing what happens in the company between quarterly meetings keeps the board close enough to actually help.

During the process, over-communicate with your team: plan messages deliberately and repeat them as often as possible.

Exit conversations need pre-existing trust on both sides; cold approaches rarely close. Light-touch contact with future acquirers and even biggest competitors is enough; she calls this the whole secret sauce of the second exit.

Valuation is also negotiation: strong competing interest or unique assets give you leverage to push higher.

Meet founders of funded companies in your sector at conferences and industry dinners: they share learnings, have investors on board, and are the top source of a VC's best deal flow. Cold outreach can work, but only with a researched, targeted reason why this specific investor.

Revent works with founders post-investment to track whether the company will be fundable in 12 to 18 months, steering via burn reduction or pivots early. Raising at the last minute is where companies die.

Each of these shapes future rounds, investor dynamics, and exit optionality.

Also beware of strategic investor terms like rights of first refusal on exits, which can limit your future options.

A dedicated startup lawyer sees dozens of financing rounds a year and can spot exotic terms in minutes. Founders still show up saying 'we just signed a term sheet, please implement it', and terms agreed there are almost impossible to revisit later.

Maizar's firm works this way as risk sharing with founders. It makes high-quality legal advice compatible with startup liquidity constraints; the choice between low-cost and premium counsel is then a strategic decision, not a cash-flow one.

Exit readiness is a permanent operating state, not a project you start when a buyer appears.

Buyers know a 20 percent grower will not suddenly do 40. Avrios built slightly different plans per buyer type (standalone speed for financial buyers, synergies but slower execution for strategics). If the process drags and you miss your numbers, the valuation gets renegotiated.

At 60 employees, Avrios ran the sale with the CEO, CFO, and one other person, plus bankers and lawyers for materials, data room, and scheduling. Post-exit rule: the company must be ready to be sold every single day (financials reconciled, CRM data clean, contracts in order).

Gervazio dropped one offer because her energy with the fund was off and a reference call with a portfolio CEO confirmed it; calls about the eventual buyer (Battery) confirmed a relationship built since 2021. Trust and the company's future mattered alongside the valuation threshold set with the board.

Keep profitability in mind and build relationships with potential acquirers early; it makes a future exit far smoother.

This dual-track setup meant yamo was ready for hard decisions when the financing fell through.

The compression manufactures urgency and FOMO that a drawn-out process never generates.

It is about being sharp on fundamentals: why now, why you, what you built, how it is growing.

Add automated revenue recognition and clean invoicing on top; the value is in the connections and instant access to clean data.

Also resist covering every aspect perfectly from the start; that perfectionism is the mistake Fabienne Doerig warns every founder about from her own projects.

His own most underestimated success factors as an angel: co-investing with people whose networks and market insight differ from his, joining the board to push for product-market fit early, and separating strategy (board) from execution (management) in writing.

The milestone an investor believes the company should hit and what the founder believes she can achieve are often very different; surfacing that gap early prevents later conflict.

Beltramelli was raising a Series B when Miro approached; Miro's 100M+ users offered his AI technology a scale Uizard could not reach independently. Weigh the certainty of the offer against the probability-weighted outcome of continuing.

Roughly 90 percent of M&A processes never close, so exciting the team early is dangerous; Figma-Adobe is the cautionary tale. His advice to his younger self: hire a professional M&A banker instead of running the legally and financially intense process as a founder.

Painful for investors because seed rounds got bigger and pricier, but it democratizes access: AI does not select by who has money, so the best founders rather than the most visible ones get a shot.

In diligence a non-integrated unit with no synergies, no shared functions and no product integration gets no credit for the paper markup. Cross-selling into the acquired base and scaling shared functions is where the sum exceeds the parts.

Gervazio's framing: the multiple is just a result of company quality; inorganic growth must serve the actual product vision, not be storytold into it.

Capacity is set by covenants like net debt to EBITDA (later stage) or gross debt to ARR (earlier). Unlike shareholders, a bank does not care about a bad month; miss interest payments and it seizes assets, so cash service comes first.

A smaller target should add growth since profitability is already covered; avoid deals that damage either side of the growth-profitability balance.

Gervazio's rule for an important deal: be on site every single day for the first two to three months to build trust. The board expects everything under control four weeks after closing.

At an ETH pitch competition Goeldi already knew six of eight companies from AI scanners. He no longer skims a deck before a first call: AI pre-analyzes market, positioning, and what must be true for outlier success, raising conversation quality. Investment judgment (broad pattern context, having seen how a situation played out ten years ago) remains human.

By Series A to C, around 30 percent of repeat founders headquarter abroad. Wehmeier's framework: Europe has proven it is a great place to start and scale, and now must win on stay, which requires risk culture as core infrastructure, competitive public capital markets, and playing the narrative game other regions already play.

Pension funds overweight fees versus long-term ROI and read regulations as barring illiquid assets. Wehmeier half-jokes that the highest-leverage intervention is poaching experienced pension investment professionals from the US, because many funds simply lack teams able to execute.

Despite the principal-agent conflict of a board seat, Chong finds that founders who can say this is not going as planned get better solutions. The highest-performing founders she knows are exactly the self-aware ones who know when they are hitting walls and when to take advice pragmatically.

His test for the difference: is the team building for themselves because it is cool, or building to change how a market works, with customers, growth and eventual attractiveness to an acquirer. If budget-out equals end, it was never a startup.

Bigger rounds mean longer due diligence and require running multiple parties in parallel because you never know who will actually close. He has seen VCs sign term sheets and not follow through.

Series A companies often run blind on unit economics and scale losses. Series B needs board reporting, consolidation, and subsidiaries for internationalization. Series C requires IFRS or GAAP numbers for the last two years and investor-grade reporting, which cannot be produced overnight.

Investors follow mandates (returns, impact, portfolio fit); a rejection often reflects timing or portfolio constraints, not quality. Antonia's rule: count your yeses, ignore individual nos, but if the entire market says no, the market is telling you something.

Antonia's founder-side lesson: people invest in you, not the year-2027 number on the last slide. Practical move: if an investor sits in Berlin, announce you are in Berlin for three days and stack in-person meetings; research what the person cares about in your topic.

Victoria describes it as almost one day to the next: once the first company in the space made an acquisition, several competitors moved too. Google won on price, cultural fit, and timing; waiting longer would likely have meant the IPO path.

David quotes YC's Dalton: in YC you can say you are building rockets or going against Google and investors will not blink. The looming room of 100-200 investors at demo day creates urgency normal founders cannot manufacture, letting YC companies set high caps with minimal revenue; he argues this repays the standard 7 percent.

That MRR level proves the founder has understood the customer problem, pricing and go-to-market. EWOR reports its fellows raise on those terms on average, which they estimate at about 2.5x more than comparable founders outside such programs.

Made says this conservatism was true when SumUp raised 15 years ago and is still true today, and half-jokes that it may be why Silicon Valley is Silicon Valley. Bank statements also reveal whether customers actually pay, since cash flow problems are one of a million ways startups die.

The balancing act: raise too much too early and you give away equity you cannot deploy; raise too little and strained cash flow forces you to stop-start growth or accept bad terms. Fabrice Grinda told him he missed payroll 27 times across his companies. Investors who exploit such moments for liquidation preferences or half-price valuations are the wrong investors.

The corporate umbrella funded international expansion and taught them what operating as a financial institution really requires, which Toivonen says served them well long after. The big fintech rounds had not happened yet, so corporate backing was the realistic path to resources.

Strong internal sponsors move on, the frontier becomes standard practice, and units get refocused on core efficiency, as happened at BBVA during peak COVID. Founders inside corporates should watch for that moment rather than take the setup as permanent.

The board asked whether the last third was found; the answer was no, and the shutdown was decided. Gunzenhauser notes a startup is always on the verge of bankruptcy and nothing is certain until the money is on the bank.

Every acquirer Nanoleq talked to had profitability requirements. The transition is also a poker game: neither side wants to disclose strategy, which makes it hard to shape your team and roadmap toward what the buyer actually needs. Acquisitions are also much more about the team than the technology.

With board members on different investment timelines, complete alignment is rare; transparency about diverging interests, with company needs first, is how you handle it. Her one advice to first-time founders: choose a board that enables you, impact matters more than names.

A VC invests other people's money for a limited period. If the fund needs an exit and the company is not exit ready, even a nice person becomes challenging because managing partners push pressure down the chain. Always ask a prospective investor about their investment horizon.

Founders are over-optimistic by nature, which is useful normally but dangerous in a crisis: with an optimistic founder, the modeled worst case is still not the real worst case. The board must push scenario planning to the worst-worst case so the company can survive, and that only works if the relationship was established before the crisis.

Rounds raised at sky-high 2021 valuations now force sales below the preference stack, so investors recover money while founders get nothing. Most first-time founders are unaware that the round raised just before an exit can decide whether they personally see any of the price.

Growth rounds remain rare in Switzerland, so even a rock-star case cannot choose its investors; they joked about being a quasi-public company. US investors' brief appetite for Europe has receded, leaving Swiss founders stuck with local money; the practical defense is founder-to-founder reference calls on investors.

Equity deals into private companies with milestone terms mean even insiders cannot say whether an exit succeeded; without the bankruptcy the question could have stayed open for a decade. Founders cover up failure, and this ambiguity is one of the most underestimated facts of the ecosystem.

M&A is a trust-based process for both sides; burning that trust is the red flag to avoid creating.

Communicate fast once signed so the story does not come out in a form you did not choose. Expect a defined transition period with milestones, use a project name during legal limbo, and accept that some employees you wanted to keep will not identify with the acquirer and leave.

Bling originally planned to bootstrap and did not know how VCs worked; media coverage of a young founder rebuilding pocket money brought investors to them. The later the round, the less founder characteristics count versus reportings, growth curves and strategy.

She was not seeking a large round; funds in serious dialogue told her competitors would speed up, and it was true rather than a sales line. Changing strategy toward growth is significantly easier when you have already shown you can be profitable, as Brite first was in 2022.

Entry barriers for D2C have never been lower because Shopify and Klaviyo price monthly and scale with revenue. The big cost buckets were product development and inventory; content was shot against bedsheets in an Airbnb, and 99 percent of content is still produced in-house.

The practical corollary is to speak to multiple investors in parallel to create competitive tension and better terms.

VC math needs one company to return the whole fund: if a VC owns 10 percent, the company must exit at 10 times the fund size, meaning a 100 to 200 million euro fund needs a billion-euro outcome. Founders systematically underestimate what 'massive success' means to their investors.

Exits in the 10 to 100 million euro range are usually acqui-hires where the buyer incentivizes the founders, not the VCs. Late-stage growth drives returns: moving from a 1 billion to a 2 billion exit doubles the entire fund return, which is why VCs push relentlessly for scale.

A fund's LPs judge performance over a 10 to 15 year lifetime largely by markup rounds ('Sequoia just gave us a huge up round'). That is part of why VCs push portfolio founders toward the next fundraise even while claiming to want what is best for the company.

Round to round, investors want a meaningful value step; 10x jumps exist but are outliers. His advice: focus on customers and revenue and let your board VCs worry about funding mechanics; company first, investors second.

Typical examples: signing term sheets before legal advice, transferring shares without checking tax consequences, and IP-relevant work done without proper contracts.

One startup signed an angel term sheet with a participating liq pref; renegotiating with the angels failed. Only pressure from second-round investors eventually forced the angels to give it up, an outcome no founder can count on. The founders' incentive then depends on an exceptional exit.

This formal requirement is easily overlooked by startups and surfaces painfully in exit due diligence, where the buyer scrutinizes whether the IP chain is fully secured.

Engage early to create trust, and keep your messaging to these parties consistent over years.

That asymmetry is the argument for professional advisors on financials, contracts, document readiness, and negotiation.

The team reached out to 60 to 70 companies to map the buyer universe, ran 12 to 15 extensive management calls, and closed in about three months. Selling a company works like enterprise sales or fundraising: you need a real pipeline.

Private equity buyers do deals for a living and can close in a month; you are a first-timer at their poker table, so learn the game before sitting down. Strategics tend to pay higher multiples when the fit is real, but move far slower, involve many stakeholders, and need relationships built much earlier.

Changing sales processes and Salesforce sequences make go-to-market data hard to reconstruct. No company green-checks every box: nail the critical items (IP assignment, employee contracts, cap table and options documentation, transfer pricing) and accept that minor gaps become price deductions, not deal breakers.

Bloomberg argues VCs are transforming to stay in the game over much longer periods, competing with classic private equity; the traditional VC model is fading at the top.

Microsoft took Inflection AI's team with a $650m licensing deal, Google hired Character.ai's founders, and Amazon absorbed 66% of Adept's workforce and later Covariant's robotics team, all without triggering merger review.

Wall Street Journal reporting; companies that bought growth without strong fundamentals now face failure or discounted acquisition, an argument for building profitable from the start.

Explanations range from a stronger US ecosystem to deeper capital markets; either way the gap is the thing to close.

Startups have gotten older at every stage over the decade; candidate causes include lower burn, more professionalized funding processes, and more interim rounds.

As the bar for IPOs keeps rising, secondaries shift from stopgap to standard exit path.

Investor capital is concentrating on the AI narrative; the unresolved question is whether these cash-burning companies can ever justify the prices paid.

Klarna filed for a US listing (its second attempt in three years despite a battered valuation), and Revolut was rumored to follow, described as a further slap in the face of European capital markets.

A counterexample to founder-unfriendly practices in North America and Europe: personal liability is a direct way of destroying entrepreneurship.

An analysis of YC funding patterns puts cybersecurity ahead of all other categories in growth, driven by everything now running on software; the trend may only be beginning.

Antitrust concerns (Google had just failed to acquire HubSpot) and the CrowdStrike incident influenced the 4-year-old company's decision.

Generative AI promises one lawyer doing the work of five; valuations price that future, not current revenue.

The period tracker raised a record $200m in 2024. Critics saw proof that capital flows to male teams even in women's health; supporters argued it validates the market and opens doors for female-led startups.

Figures cited by Female Invest's founders in their $11.2m funding announcement; the company also broke records with a $1m crowdfunding round in 4 minutes.

The decline tracks the industry's struggle to return capital to investors as IPO and M&A activity stalled.

Venture is an outlier-driven game and early momentum matters when picking funds to invest in.

This is not only about fairness of chances; it is missed alpha for investors who claim to hunt inefficiencies.

CNBC investigation: when a fund is very large, senior partners cannot focus on early stage, driving a possible trend back to smaller, high-focus funds.

Itamar Novick breaks down how a $50m exit can turn into $0 for founders through earn-out structures, despite what LinkedIn celebration posts suggest.

The breakdown: $100M sale price, $63M to Series A/B investors, $10M to seed investors, $27M split between 3 co-founders equals $9M each, minus 37% capital gains tax equals $5.7M, minus unpaid early salaries and a $500K personal loan equals $4.8M.

Understanding this trade-off early shapes the right approach to both fundraising and exit preparation.

Sabba Keynejad cycled to coworking spaces he could not afford and was rejected by YC twice in one weekend, yet VEED still grew 60 percent month over month.

They neglect fundamental checks like founder alignment and financial diligence. Thomas Dubendorfer's own first deal was a lucky win, but he is clear that luck is not a strategy.

Founders should choose angels who bring relevant networks and deliberately activate them post-investment through clear, frequent communication.

A simple, often overlooked truth: in both investing and building, execution trumps intention every time.

Buyers discount non-integrated assets, so financial arbitrage without operational integration does not hold.

Carta data suggests the AI-native, ChatGPT-era cohorts may be moving faster to fundable milestones, reviving the pace of Series A rounds.

Peter Walker's Carta data illustrates the split market: AI companies get any funding they want while the rest wait years longer between rounds.

Similarity bias means capital holders decide who even gets on the launch ramp; a white male dominated industry with few immigrants and few ex-operators keeps fishing in the same founder pool.

Responding to anti-diversity takes circulating on LinkedIn, she self-describes as a capitalist at heart working for a for-profit fund: the argument is ROI, not belief.

Wehmeier calls this the most consistently misread chart in his report. Founders and talent locked up on a problem that is not the highest-opportunity thing they could work on is an opportunity cost for the ecosystem.

Chong sees over-raised early rounds with very little proven set expectations the company later cannot meet.

Christian argues the startup bubble one-sidedly recommends the VC route partly because funds face pressure to deploy LP money, which creates social pressure on founders to accept it and announce rounds. Many good companies are better served by other financing paths.

Antonia's team, all ex-founders, probes why founders are committing 10 years of opportunity cost, then watches how fast they build, ship, test, and iterate, and even how quickly they reply. The idea itself is evaluated third.

Sabba says a San Francisco start would have meant faster funding and years of free product (he cites Figma being free for roughly seven years), but charging early made Veed data-driven, disciplined, and near profitable, with founders and employees owning the vast majority.

Sabba was rejected by dozens of VCs and twice by YC while bootstrapping Veed to 7M ARR. As an art school graduate with no big-tech resume, he was outside the investor ICP despite being gritty and a builder.

Founders feel thankful when money lands, but the longer you play the game the more you realize you must give a lot in the process while investors stand to make outsized returns.

Founders tend not to be critical of VCs because they feel they must be grateful for the money. Herzog argues the investor decision should look like a hiring process, since you are stuck with shareholders until a change of ownership.

Transparency does not mean reporting every detail (that is over-informing); it means being open about what is. Herzog's test: would you want your own employees to oversell to you? The board does not want that either.

There is no free lunch and commitment is different when work is paid, but the currency matters: Herzog would always go for options over cash for non-cash-positive companies.

Ava, an AI-powered hardware medical device built on original research, had no path without the roughly 50 million Swiss francs it raised. expeerly began as a near-agency model that was profitable immediately; even though it has since become fundable, she still refuses funding because the package she chose is a different company.

A seed at a 10 million valuation means the company must grow into 20 or 30 million for the next round, indefinitely. Only take that path if the market is truly enormous and you personally can carry the constant insecurity and anxiety of the race.

Her planning asks what a team capped around 10 to 20 people can maximally achieve, using AI, software and contractors to get four to five times more out of each person. The old funded world threw people at problems; resource scarcity forces you to the technological edge.

Lea raised 50M dollars for Ava and lost control when the Series C collapsed; venture capital is about control, not just funding.

An acquisition process resembles a late-stage financing round; messy accounting, contracts and bookkeeping explode the workload exactly when you can least afford it. Focus on growth, keep the paperwork clean along the way.

In a tough market the key credential is a credible path to profitability, not necessarily achieved but achievable if needed.

VC is rocket fuel: put it in a car that cannot take off and it is harmful. Founders should first decide what problem and customers they want, then ask how to finance it, and consider VC only if they truly want to build something very big on a continuous fundraising track.

VCs seek founders who are a bit crazy and can sell their vision to customers, hires, and investors, yet grounded enough to take market feedback. His closing advice: sell your true passion and do not try to be too professional.

Changing your LinkedIn to 'stealth founder' alone gets 10 to 20 VCs reaching out from scraped data. Investors herd because judging teams is hard, so a first term sheet unlocks the rest. Build a real relationship with one or two perfect-fit funds, but drive competition, also in M&A.

Coming from a VC partner, the point is that VC is neither good nor bad but an investment choice for specific hypergrowth models.

Investor protection terms that look awkward or evil at first sight usually make sense from the investor's seat. Inexperienced founders who distrust the standard playbook slow down their own rounds; knowing what to expect eases the process tremendously. Black sheep exist, so still scrutinize.

Take inbound calls from funds even when not ready, stay coherent in your story over years (buyers keep records), engage strategics via partnerships, and check in with contacts every 6 to 12 months. Rushing to sell means a bad deal.

Rule of 40 is king for SaaS buyers (growth rate plus profitability of at least 40), but risk appetite for money-losing companies is very low, so get profitable first and then grow on top of that.

Ownership in a 100x venture is what returns the fund; a supposedly oversubscribed round can even signal that appropriate ownership levels are hard to achieve, deterring good investors.

What Sam Altman called fast fashion SaaS, Elena Verna reframes as mom-and-pop SaaS: small products built for specific communities.

Christoph Jost calls out the inflation of ARR and MRR labels across startupland.

Daniel Tomov's thesis; FTG adds the pointed question: if you are profitable at seed, why need a seed round and VC money in the first place? Andreas Goeldi made the related point that AI compresses time and capital to product-market fit, rewriting SaaS unit economics.

Except in rare winner-takes-all markets or before a major downturn, raise what you need and stay intentional about spending it.

The warning 'if they do not do your A you will not raise' optimizes for downside risk. Pick your investor like a spouse: it is like marriage but with more money involved. Index Ventures led Cradle's seed.

Victoria Ransom traces the ethos to her upbringing on a New Zealand asparagus farm; Wildfire scaled to 400 people and a Google acquisition on comparatively little capital.

The exception is highly competitive, capital-intensive industries; otherwise limited resources push you to solve problems with creativity instead of capital.

Early alignment on reporting, tools, and structure enables control and cross-selling; every delayed step prolongs inefficiency.