Investor targeting is the process of identifying which venture firms and partners are the right fit for a round, done before any outreach happens. The work weighs the firm's stage focus, sector thesis, typical check size, recent portfolio investments, available capacity, and the individual partner's specific track record and known interests, tracked in a spreadsheet or CRM that runs the entire fundraise. It is the work that separates founders who pitch the right investors and close rounds from founders who pitch any willing investor and burn months getting filtered.
The firm-level criteria that matter: stage (seed funds invest at seed; growth funds don't invest at seed; targeting wrong-stage funds wastes everyone's time),...
An option pool is the block of startup equity reserved (but not granted) for stock options to current and future employees, advisors, and consultants. It is sized as a percentage of fully diluted shares and replenished at most priced rounds. It's created on the cap table as authorized-but-unissued shares within the [Equity Incentive Plan], and grants are pulled from it over time as the company hires.
Typical pool sizes by stage (2025 Carta and PitchBook benchmarks):
| Stage | Pool size (% of post-money) | What it has to cover |
|---|---|---|
| Pre-incorporation / formation | 10-15% | Founders + first 5-10 employees |
| Post pre-seed (SAFE) | 10-15% | First 10-15 hires |
| Post priced seed | 12-18% | Engineering team build-out, first sales hires |
| Post Series A | ...
Affiliate marketing is the pay-for-performance acquisition channel where third parties earn commission for driving qualifying actions, typically sales or signups. Affiliates promote the product through their channels (websites, content, social media, email lists) and receive a percentage of revenue or fixed fee per conversion generated, tracked through unique referral links or codes. It's the original performance-based marketing channel, predating digital advertising, and remains a significant acquisition source for many B2C and some B2B businesses.
How affiliate marketing works:
An "AI wrapper" is the dismissive term for AI products that primarily call foundation model APIs and add minimal value beyond a UI on top. The critique: such products have no defensible moat because anyone can call the same OpenAI, Anthropic, or Google APIs. The label is applied (sometimes fairly, sometimes lazily) to a large fraction of post-ChatGPT AI startups. Whether the criticism is fair depends entirely on what the company has built beyond the API call.
The fair version of the critique:
A pure AI wrapper:
Network effects exist when a product becomes more valuable to each user as more users join, creating a self-reinforcing dynamic where leaving becomes increasingly costly. They are the strongest category of moat available to a startup because they compound rather than depreciate. They explain why a handful of platforms (Facebook, Uber, eBay, LinkedIn, Visa, Microsoft Excel) dominate their categories despite having no patent or proprietary technology that competitors could not replicate.
The major types: direct network effects (one-sided, also called same-side) where each user benefits directly from more users of the same kind, as in phones, fax machines, WhatsApp, or Zoom; two-sided or multi-sided network effects where multip...
Common stock is the basic ownership share class of a corporation, held by founders, employees, and option-holders after exercise. It represents residual ownership in the company after all preferred-share rights are satisfied. In a venture-backed startup, common stock is junior to every series of preferred stock in liquidation waterfalls and typically carries fewer rights than preferred, though it carries the upside in exit scenarios above the preferred preference amounts.
The structural position of common stock in a venture-backed cap table: founders hold common from day one, employees receive options that exercise into common, advisors hold common (often via restricted stock or options), and early non-priced investors (SAFE an...
A story arc is the narrative structure underneath a winning pitch, used to make a pitch emotionally resonant and memorable rather than just informational. It typically follows a hero's-journey-style progression (the current state of the world, the inciting problem that disrupts it, the insight or capability that becomes available, the solution that emerges, the early evidence it's working, and the bigger world this leads to), and is dramatically more effective than a feature-list walkthrough would be. It is the deeper layer of pitching that distinguishes founders who can fundraise from founders who can't, and the layer most under-taught in standard pitch-deck advice.
The classical narrative template applied to pitching: stasis ("h...
Preferred stock is the share class issued to venture investors in priced equity rounds. It carries a defined package of economic rights (liquidation preference, anti-dilution protection, accruing dividends in some structures) and control rights (protective provisions, board representation, consent thresholds, registration rights) that common stock does not have, with each series typically receiving its own terms. It is the structural contract that defines investor protections and the share class that determines who actually gets paid in non-home-run outcomes.
The standard package of preferred-stock rights in modern venture rounds:
Burn rate is the monthly pace at which a startup spends cash, split into gross burn (total outflow) and net burn (outflow minus revenue). Founders and investors must keep these two measurements separate. Net burn is the number that determines runway and gets the most investor attention; gross burn is the number that determines how exposed the company is if revenue stops.
The two numbers, with examples:
| Company state | Monthly expenses | Monthly revenue collected | Gross burn | Net burn |
|---|---|---|---|---|
| Pre-revenue | $150K | $0 | $150K | $150K |
| Early revenue | $150K | $50K | $150K | $100K |
| Growth stage | $400K | $300K | $400K | $100K |
| Approaching cash-flow neutral | $500K | $480K | $500K | $20K |
| Cash-flow positive | $500K | $550K | $500K | -$50K (cash growing) |
Why both numbers matt...
An arbitration clause is a contract provision requiring that disputes between the parties be resolved through binding arbitration rather than court litigation. The clause typically specifies the arbitration provider (AAA, JAMS, ICC), the rules, location, arbitrator selection, class action waivers, and confidentiality terms. It has implications for cost, speed, privacy (arbitration is private; court is public record), appeal rights (extremely limited in arbitration), and discovery scope (typically more limited than court). Arbitration clauses are increasingly common in commercial contracts, employment agreements, and consumer terms of service. It's the contract provision that determines whether disputes go to court or to a...