Behind the curtain: Finance

What goes on behind the closed doors of a partner meeting? Why didn’t that investor back your round? Investor and Limited Partner thinking is often cloaked in secrecy—after all, nobody wants to be the one to say no to the next great Unicorn. So this year we’re taking you behind the scenes to show you how investors think. From product and tech, to culture, to finance and more, we take you behind the scenes for five-minute glimpses into how investment decisions are made.

How are you funded?
Before revenues kick in, a startup runs on funding. Whether that’s a simple loan, revenue-based lending, convertible debt, traditional equity—or just your hard-won savings—the fuel for growth comes from outside backers. Even after you’ve hit break-even, one of the things that distinguishes startups is that they reinvest earnings into R&D as they build out differentiated technology, chase market dominance, and compete for the best talent.

The third question, then, is how you’re funded—and how that will shape your growth. Are employees properly motivated? Do your returns exceed the interest on your loans? When do convertible notes become equity? And how does your cashflow constrain your ability to pour earnings back into research and development?