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description: Gain an overview of how to build a high-performing startup team. See topics like attributes of successful teams and how to use mentors.
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ms.date: 06/17/2024
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author: vhawk85
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ms.author: vahughes
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ms.topic: unit
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ms.collection: learn-startups
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durationInMinutes: 2
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content: |
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[!include[](includes/1-introduction.md)]
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### YamlMime:ModuleUnit
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uid: learn.startups.fundraising.introduction
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title: Introduction
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metadata:
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title: Introduction
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description: Gain an overview of how to build a high-performing startup team. See subjects like the attributes of successful teams and how to use mentors.
description: Learn about common types of startup investors such as friends and family, angel investors, and venture capitalists. See tips for seeking funds from each type.
description: Learn about common types of startup investors such as friends and family, angel investors, and venture capitalists. See tips for seeking funds from each type.
description: Find out how to raise money from investors for your startup. Understand the tradeoffs between gaining funding and giving up some control of your business.
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ms.date: 06/17/2024
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author: vhawk85
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ms.author: vahughes
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ms.topic: unit
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ms.collection: learn-startups
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durationInMinutes: 5
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content: |
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[!include[](includes/3-investor-types.md)]
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### YamlMime:ModuleUnit
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uid: learn.startups.fundraising.investor-types
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title: Different types of investors
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metadata:
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title: Different types of investors
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description: Find out how to raise money from investors for your startup. Understand the tradeoffs between gaining funding and giving up some control of your business.
description: Learn about funding rounds. See how to contact investors and understand term sheets. Find out how to make it easy for investors to complete due diligence.
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ms.date: 05/17/2024
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author: ryanmesches
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ms.author: vahughes
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ms.topic: unit
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ms.collection: learn-startups
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durationInMinutes: 10
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content: |
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[!include[](includes/4-funding-rounds.md)]
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### YamlMime:ModuleUnit
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uid: learn.startups.fundraising.funding-rounds
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title: Raise a funding round
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metadata:
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title: Raise a funding round
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description: Learn about funding rounds. See how to contact investors and understand term sheets. Find out how to make it easy for investors to complete due diligence.
description: Review concepts of startup fundraising. Topics include pitching strategies, the differences between types of investors, and due diligence research.
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ms.date: 06/17/2024
8
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author: vhawk85
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ms.author: vahughes
10
-
ms.topic: unit
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ms.collection: learn-startups
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durationInMinutes: 4
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quiz:
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questions:
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- content: "If you're pitching an early-stage investor, the most important thing to demonstrate is:"
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choices:
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- content: "That you've researched the investor and know that your startup is a fit for their investment mandate."
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isCorrect: false
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explanation: "Incorrect. Making sure your startup is a good fit for an investor is important, but it's not the only option."
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- content: "That you're focusing 100 percent of your time on your startup."
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isCorrect: false
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explanation: "Incorrect. Showing investors that you're focusing 100 percent of your time on your startup is important, but it's not the only option."
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- content: "That you have evidence of product-market fit in the form of customer traction or revenue."
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isCorrect: false
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explanation: "Incorrect. Showing that you have customer traction or revenue is important, but it's not the only option."
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- content: "That you've identified growth levers you can use to generate traction, revenue, and profit."
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isCorrect: false
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explanation: "Incorrect. Showing that you've identified growth levers is important, but it's not the only option."
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- content: "All of the above."
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isCorrect: true
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explanation: "Correct. When you pitch an early-stage investor, you need to ensure your startup is a good fit for the investor. You also need to provide evidence of your commitment, product-market fit, and growth levers."
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-
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- content: "The main difference between angel investors and venture capital (VC) funds is:"
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choices:
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- content: "Angel investors get to appear on *Shark Tank*."
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isCorrect: false
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explanation: "Incorrect. The main difference has more to do with how money is invested, not the public appearances of the investors."
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- content: "VCs only invest in software startups."
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isCorrect: false
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explanation: "Incorrect. A VC often focuses on one or more specific sectors, but VCs aren't limited to software startups."
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- content: "Angels invest their own money, while VCs invest mostly other people's money."
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isCorrect: true
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explanation: "Correct. An angel investor is a wealthy individual who invests their own money. VC funds are professional investment firms that generally invest money that's provided by institutional investors."
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- content: "Angel investors generally don't expect to receive a financial return."
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isCorrect: false
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explanation: "Incorrect. Like any other type of investor, angel investors look for a healthy rate of return on all their investments."
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-
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- content: "If you had an idea for a startup and had yet to launch a minimal viable product (MVP), your most likely source of external funding would be:"
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choices:
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- content: "Friends and family."
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isCorrect: true
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explanation: "Correct. Friends and family often provide initial funding for startups. When you only have an idea and haven't yet made a product, friends and family are generally the only investors who provide funding."
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- content: "Angel investors."
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isCorrect: false
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explanation: "Incorrect. Generally, angel investors consider investing only after a startup has launched an MVP or product and generated early traction in the form of product usage and revenue."
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- content: "VC funds."
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isCorrect: false
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explanation: "Incorrect. Generally, VC funds consider investing only after a startup has launched a product, generated early traction, and can demonstrate product-market fit."
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- content: "The stock market."
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isCorrect: false
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explanation: "Incorrect. Investors put money into the stock market. The stock market isn't a source of funding for startups."
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- content: "Which of these topics is the only one an investor is likely to cover in due diligence?"
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choices:
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- content: "Employment contracts including terms of IP assignment."
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isCorrect: false
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explanation: "Incorrect. Due diligence covers employment contracts, but it's not the only topic."
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- content: "Previous investments, including any friends and family round that the company has raised."
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isCorrect: false
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explanation: "Incorrect. Due diligence covers previous investments, but it's not the only topic."
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- content: "Disputes with previous employees."
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isCorrect: false
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explanation: "Incorrect. Due diligence covers disputes with previous employees, but it's not the only topic."
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- content: "Loans from the founders to the company."
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isCorrect: false
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explanation: "Incorrect. Due diligence covers loans from founders to companies, but it's not the only topic."
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- content: "All of the above."
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isCorrect: true
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explanation: "Correct. Due diligence covers employment contracts, previous investments, disputes, and loans, among other topics."
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1
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### YamlMime:ModuleUnit
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uid: learn.startups.fundraising.knowledge-check
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title: Module assessment
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metadata:
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title: Module assessment
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description: Review concepts of startup fundraising. Topics include pitching strategies, the differences between types of investors, and due diligence research.
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ms.date: 06/12/2025
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author: vaquresh
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ms.author: vaquresh
10
+
ms.topic: unit
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+
ms.collection: learn-startups
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+
durationInMinutes: 4
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quiz:
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questions:
15
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- content: "If you're pitching an early-stage investor, the most important thing to demonstrate is:"
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+
choices:
17
+
- content: "That you researched the investor and know that your startup is a fit for their investment mandate."
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+
isCorrect: false
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+
explanation: "Incorrect. Making sure your startup is a good fit for an investor is important, but it's not the only option."
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+
- content: "That you're focusing 100 percent of your time on your startup."
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+
isCorrect: false
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+
explanation: "Incorrect. Showing investors that you're focusing 100 percent of your time on your startup is important, but it's not the only option."
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+
- content: "That you have evidence of product-market fit in the form of customer traction or revenue."
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+
isCorrect: false
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+
explanation: "Incorrect. Showing that you have customer traction or revenue is important, but it's not the only option."
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+
- content: "That you identified growth levers you can use to generate traction, revenue, and profit."
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+
isCorrect: false
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+
explanation: "Incorrect. Showing that you identified growth levers is important, but it's not the only option."
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+
- content: "All of the above."
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+
isCorrect: true
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+
explanation: "Correct. When you pitch an early-stage investor, you need to ensure your startup is a good fit for the investor. You also need to provide evidence of your commitment, product-market fit, and growth levers."
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+
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+
- content: "The main difference between angel investors and venture capital (VC) funds is:"
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+
choices:
35
+
- content: "Angel investors get to appear on *Shark Tank*."
36
+
isCorrect: false
37
+
explanation: "Incorrect. The main difference has more to do with how money is invested, not the public appearances of the investors."
38
+
- content: "VCs only invest in software startups."
39
+
isCorrect: false
40
+
explanation: "Incorrect. A VC often focuses on one or more specific sectors, but VCs aren't limited to software startups."
41
+
- content: "Angels invest their own money, while VCs invest mostly other people's money."
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+
isCorrect: true
43
+
explanation: "Correct. An angel investor is a wealthy individual who invests their own money. VC funds are professional investment firms that generally invest money that's provided by institutional investors."
44
+
- content: "Angel investors generally don't expect to receive a financial return."
45
+
isCorrect: false
46
+
explanation: "Incorrect. Like any other type of investor, angel investors look for a healthy rate of return on all their investments."
47
+
48
+
- content: "If you had an idea for a startup and had yet to launch a minimal viable product (MVP), your most likely source of external funding would be:"
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+
choices:
50
+
- content: "Friends and family."
51
+
isCorrect: true
52
+
explanation: "Correct. Friends and family often provide initial funding for startups. When you only have an idea and haven't made a product yet, friends and family are generally the only investors who provide funding."
53
+
- content: "Angel investors."
54
+
isCorrect: false
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+
explanation: "Incorrect. Generally, angel investors consider investing only after a startup launches an MVP or product, and generates early traction in the form of product usage and revenue."
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+
- content: "VC funds."
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+
isCorrect: false
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+
explanation: "Incorrect. Generally, VC funds consider investing only after a startup launches a product, generates early traction, and can demonstrate product-market fit."
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+
- content: "The stock market."
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+
isCorrect: false
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+
explanation: "Incorrect. Investors put money into the stock market. The stock market isn't a source of funding for startups."
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+
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+
- content: "Which of these topics is the only one an investor is likely to cover in due diligence?"
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+
choices:
65
+
- content: "Employment contracts including terms of IP assignment."
66
+
isCorrect: false
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+
explanation: "Incorrect. Due diligence covers employment contracts, but it's not the only topic."
68
+
- content: "Previous investments, including any friends and family round that the company has raised."
69
+
isCorrect: false
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+
explanation: "Incorrect. Due diligence covers previous investments, but it's not the only topic."
71
+
- content: "Disputes with previous employees."
72
+
isCorrect: false
73
+
explanation: "Incorrect. Due diligence covers disputes with previous employees, but it's not the only topic."
74
+
- content: "Loans from the founders to the company."
75
+
isCorrect: false
76
+
explanation: "Incorrect. Due diligence covers loans from founders to companies, but it's not the only topic."
77
+
- content: "All of the above."
78
+
isCorrect: true
79
+
explanation: "Correct. Due diligence covers employment contracts, previous investments, disputes, and loans, among other topics."
description: Review the fundamentals of startup fundraising. Concepts include finding investors versus bootstrapping, types of investors, and fundraising rounds.
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ms.date: 06/17/2024
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author: vhawk85
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-
ms.author: vahughes
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-
ms.topic: unit
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-
ms.collection: learn-startups
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-
durationInMinutes: 1
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-
content: |
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[!include[](includes/6-summary.md)]
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### YamlMime:ModuleUnit
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uid: learn.startups.fundraising.summary
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title: Summary
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metadata:
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title: Summary
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+
description: Review the fundamentals of startup fundraising. Concepts include finding investors versus bootstrapping, types of investors, and fundraising rounds.
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In this module, we focus on why and how you raise money from investors to fund the growth of your startup.
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You'll need to decide whether to use founders' savings or existing revenue streams to continue growing, or whether it makes to seek external funding. This module can help you make that decision.
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The first decision you need to make is whether to use founders' savings or existing revenue streams to continue growing, or whether it makes sense to seek external funding. This module can help you make that decision.
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There are different types of investors that might be interested in your startup with different investment goals. By working through a hypothetical example, we unpack the perspective of an early-stage investor and look at how they might approach investment decision-making.
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## Learning objectives
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By the end of the module, you'll have a better understanding of:
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By the end of this module, you have a better understanding of:
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- Why you might need to raise money for your startup.
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- How to evaluate the pros and cons of raising money from investors versus organic growth.
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