An angel investor is an individual who invests their own personal money in early-stage startups, typically $10,000 to $250,000 per deal. The investment is usually in exchange for equity through SAFEs, convertible notes, or priced rounds. Angels usually invest at the pre-seed and seed stages, often before institutional venture capital firms get involved, and they are one of the primary categories of [Startup Investment] at the earliest stages. Many were former startup founders or operators investing back into the ecosystem they came from.
Angels in the US must qualify as accredited investors under SEC Regulation D ($200,000+ annual income, $300,000+ with a spouse, or $1 million+ net worth excluding primary residence), though e...
A distribution waterfall is the contractual order in which proceeds from VC fund investments get distributed to limited partners (LPs) and general partners (GPs). It is typically structured with four tiers: (1) return of LP capital (LPs get their committed capital back), (2) LP preferred return (typically 8% annual hurdle on capital), (3) GP catch-up (GP captures returns until reaching 20/80 split on profits), (4) carry split (typically 80/20: 80% LPs, 20% GPs). The waterfall determines how returns flow back from successful exits and is one of the most-important structural elements of fund economics. Distinct from "liquidation waterfall" (which is how proceeds from a portfolio company exit get distributed among stockh...
A distributed team is one where there is no central office and employees are spread across multiple locations by design, often globally. The team's operating model is built around distribution from the start rather than treating remote work as accommodation. The term is used somewhat interchangeably with "remote-first" or "fully remote" but emphasizes the geographic distribution dimension (employees in many cities, possibly many countries) rather than just the absence of office presence. The model was pioneered by companies like Automattic, GitLab, Buffer, and Zapier that built their organizations around distribution from founding. It is the most extreme form of remote operating and the model that requires the most delibera...
A direct listing is a public listing in which a company sells existing shares on a stock exchange without raising new capital or using underwriters. Also called a direct public offering (DPO), it lets existing shareholders (founders, employees, early investors) sell directly to the public on day one and removes the price-discovery role typically played by underwriters during an IPO. It was popularized by Spotify in April 2018 and adopted by Slack (2019), Palantir (2020), Asana (2020), Coinbase (April 2021), Roblox (2021), Squarespace (2021), Amplitude (2021), and Warby Parker (2021).
The structural differences from a traditional IPO: no underwriters (the company hires "financial advisors" instead, who don't take inventory ris...
A mission statement is the concise articulation of why a company exists and what it aims to accomplish, used to align stakeholders around purpose. Most mission statements are generic enough to apply to dozens of companies ("delivering excellent products to customers") and therefore useless. The rare good mission statements are specific enough to differentiate the company and concrete enough to guide actual decisions. The mission sits alongside but distinct from the vision statement (which describes the future state) and core values (which describe how the company operates). It is one of the most-discussed and least-useful elements of company building when treated as a marketing exercise, and one of the more meaningful when...
A financial model is a spreadsheet or planning system that projects a company's revenue, expenses, cash flow, headcount, and key metrics into the future. The model serves as the operating planning document (drives hiring decisions, budget allocation, runway analysis), the capital-raising document (investors review it in diligence), and the board reporting document (actuals are compared against it each month). Model quality is a meaningful signal about how rigorously the company runs its operations. It is the document where many decisions ultimately get tested before they're made.
The core components of a financial model:
Revenue model:
Revenue recognition is the accounting principle that determines when revenue is counted on the income statement, governed in the United States by ASC 606. ASC 606 is the FASB standard effective 2018 that unified revenue recognition across industries, with specific rules for SaaS subscriptions, multi-element contracts, service-and-product bundles, and milestone-based deals. The core principle: revenue is recognized when (or as) the company satisfies its performance obligation to the customer, not when cash is collected or the contract is signed.
The five-step ASC 606 model:
QSBS (Qualified Small Business Stock) is an IRS provision under Section 1202 that excludes up to $10M-$15M (or 10x basis) in capital gains from federal tax. The One Big Beautiful Bill Act (signed July 4, 2025) created a two-regime structure: stock issued on or before July 4, 2025 follows the pre-OBBBA rules ($10M or 10x cost basis cap, $50M gross-assets ceiling, 5-year hold for the full exclusion); stock issued after July 4, 2025 follows the OBBBA rules ($15M cap inflation-adjusted after 2026, $75M gross-assets ceiling, tiered holding with 50% exclusion at 3 years, 75% at 4 years, 100% at 5 years, maximum exclusion up to $750 million). The exclusion is available to founders, early employees, and early investors. It is one of the most v...
The context window is the maximum number of tokens a large language model can process in a single input (prompt plus output). It is determined by the model's architecture and training. Everything the model can "see" for a query (instructions, examples, context, conversation history, reference documents) must fit within this token budget, making the limit one of the most consequential constraints in designing LLM applications. It's the size of the model's working memory for any given request.
The token math:
1 token ≈ 0.75 English words (rough approximation). 1 token ≈ 4 characters of English text.
So a 100,000-token context window holds roughly 75,000 words, or about 300 pages of a typical book.
How context windows have grown...
An investor update is the regular monthly or quarterly written communication founders send existing investors summarizing key metrics, wins, lows, and asks. Sometimes also sent to other supporters of the company, the update covers the period's wins, lows, the asks where the founders need help, and the current state of the business, used to maintain investor confidence between formal board meetings, surface help requests proactively, and build the trust that makes future financing easier. It is one of the most under-invested founder communication practices and one of the most leveraged: a consistent investor-update cadence dramatically lowers the friction of every subsequent fundraise.
The structure of an effective monthly in...