Top Resources for Understanding Startup Funding

Ibigstock-Top-view-of-businessman-standi-41545474t’s no secret that many activist investors are frustrated with the lack of  financial literacy among entrepreneurs today. In my own battle against the blank face in the boardroom, I’ve been following the work of  Brad Feld,  Jason Mendelson, and  Fred Wilson (in addition to asking some of our great investors questions directly).

Some of these online works can be a little overwhelming, however, with Fred Wilson’s  MBA Mondays alone returning over 90 posts. Here are a few places to get started — followed by some additional resources I’ve found useful.

Brad Feld’s Finance Fridays

Brad’s professorial writing style explains the context around numerous accounting mechanisms and why they matter. Brad will get you thinking about the big picture before you dive into vocabulary.

Select Picks:

  • Setting up your accounting system
  • Balance sheet and cash flow overview
  • Financial statements (examples, annotated)
  • Revenue projections (and why to make them).

Jason Mendelson’s Convertible Debt Series

Convertible debt (and convertible equity) is popular for seed stage companies in Silicon Valley. Jason’s series will help you get comfortable with the levers behind most seed stage negotiations.

Select Picks:

  • Conversion mechanics
  • Conversion in a sale of the company
  • Misc. terms
  • Warrants
  • Early vs. late stage dynamics.

Brad Feld’s Term Sheet Tips

Don’t forget to plan for success! Get familiar with what a term sheet looks like before you get one.

Select Picks:

  • Term sheet terms (vocabulary)
  • Vesting calculator >>  Direct link.

Fred Wilson’s MBA Mondays

Fred’s posts are among my favorite. Not only does he share concrete examples, he uses simple terms to get you familiar with almost every major financial metric that will have an impact on your business. I even printed Fred’s posts and annotated them rigorously until I understood how everything fit together.

Select Picks:

  • Profit and loss statement
  • Understanding the balance sheet
  • Understanding cash flow
  • Analyzing financial statements

Additional Resources:

  • AskTheVC model documents and standard forms
  • TechStarts open source documents
  • Others blogging about term sheets.

This post originally appeared on the author’s blog

Tyler Arnold is Co-Founder and CEO of SimplySocial Inc., a software tool that helps large companies create great content for their social media profiles. As CEO, Tyler assists with key accounts, business development, and talent acquisitions as SimplySocial grows its presence around the world.

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