review-2

Author: v-thpra

learn-pr/startup/fundraising/5-knowledge-check.yml

@@ -1,80 +1,80 @@
-### YamlMime:ModuleUnit
-uid: learn.startups.fundraising.knowledge-check
-title: Module assessment
-metadata:
-  title: Module assessment
-  description: Review concepts of startup fundraising. Topics include pitching strategies, the differences between types of investors, and due diligence research.
-  ms.date: 06/17/2024
-  author: vhawk85
-  ms.author: vahughes
-  ms.topic: unit
-  ms.collection: learn-startups
-durationInMinutes: 4
-quiz:
-  questions:
-  - content: "If you're pitching an early-stage investor, the most important thing to demonstrate is:"
-    choices:
-    - content: "That you've researched the investor and know that your startup is a fit for their investment mandate."
-      isCorrect: false
-      explanation: "Incorrect. Making sure your startup is a good fit for an investor is important, but it's not the only option."
-    - content: "That you're focusing 100 percent of your time on your startup."
-      isCorrect: false
-      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."
-    - content: "That you have evidence of product-market fit in the form of customer traction or revenue."
-      isCorrect: false
-      explanation: "Incorrect. Showing that you have customer traction or revenue is important, but it's not the only option."
-    - content: "That you've identified growth levers you can use to generate traction, revenue, and profit."
-      isCorrect: false
-      explanation: "Incorrect. Showing that you've identified growth levers is important, but it's not the only option."
-    - content: "All of the above."
-      isCorrect: true
-      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."
-
-  - content: "The main difference between angel investors and venture capital (VC) funds is:"
-    choices:
-    - content: "Angel investors get to appear on *Shark Tank*."
-      isCorrect: false
-      explanation: "Incorrect. The main difference has more to do with how money is invested, not the public appearances of the investors."
-    - content: "VCs only invest in software startups."
-      isCorrect: false
-      explanation: "Incorrect. A VC often focuses on one or more specific sectors, but VCs aren't limited to software startups."
-    - content: "Angels invest their own money, while VCs invest mostly other people's money."
-      isCorrect: true
-      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."
-    - content: "Angel investors generally don't expect to receive a financial return."
-      isCorrect: false
-      explanation: "Incorrect. Like any other type of investor, angel investors look for a healthy rate of return on all their investments."
-
-  - 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:"
-    choices:
-    - content: "Friends and family."
-      isCorrect: true
-      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."
-    - content: "Angel investors."
-      isCorrect: false
-      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."
-    - content: "VC funds."
-      isCorrect: false
-      explanation: "Incorrect. Generally, VC funds consider investing only after a startup has launched a product, generated early traction, and can demonstrate product-market fit."
-    - content: "The stock market."
-      isCorrect: false
-      explanation: "Incorrect. Investors put money into the stock market. The stock market isn't a source of funding for startups."
-
-  - content: "Which of these topics is the only one an investor is likely to cover in due diligence?"
-    choices:
-    - content: "Employment contracts including terms of IP assignment."
-      isCorrect: false
-      explanation: "Incorrect. Due diligence covers employment contracts, but it's not the only topic."
-    - content: "Previous investments, including any friends and family round that the company has raised."
-      isCorrect: false
-      explanation: "Incorrect. Due diligence covers previous investments, but it's not the only topic."
-    - content: "Disputes with previous employees."
-      isCorrect: false
-      explanation: "Incorrect. Due diligence covers disputes with previous employees, but it's not the only topic."
-    - content: "Loans from the founders to the company."
-      isCorrect: false
-      explanation: "Incorrect. Due diligence covers loans from founders to companies, but it's not the only topic."
-    - content: "All of the above."
-      isCorrect: true
-      explanation: "Correct. Due diligence covers employment contracts, previous investments, disputes, and loans, among other topics."
-
+### YamlMime:ModuleUnit
+uid: learn.startups.fundraising.knowledge-check
+title: Module assessment
+metadata:
+  title: Module assessment
+  description: Review concepts of startup fundraising. Topics include pitching strategies, the differences between types of investors, and due diligence research.
+  ms.date: 06/17/2024
+  author: vhawk85
+  ms.author: vahughes
+  ms.topic: unit
+  ms.collection: learn-startups
+durationInMinutes: 4
+quiz:
+  questions:
+  - content: "If you're pitching an early-stage investor, the most important thing to demonstrate is:"
+    choices:
+    - content: "That you researched the investor and know that your startup is a fit for their investment mandate."
+      isCorrect: false
+      explanation: "Incorrect. Making sure your startup is a good fit for an investor is important, but it's not the only option."
+    - content: "That you're focusing 100 percent of your time on your startup."
+      isCorrect: false
+      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."
+    - content: "That you have evidence of product-market fit in the form of customer traction or revenue."
+      isCorrect: false
+      explanation: "Incorrect. Showing that you have customer traction or revenue is important, but it's not the only option."
+    - content: "That you identified growth levers you can use to generate traction, revenue, and profit."
+      isCorrect: false
+      explanation: "Incorrect. Showing that you identified growth levers is important, but it's not the only option."
+    - content: "All of the above."
+      isCorrect: true
+      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."
+
+  - content: "The main difference between angel investors and venture capital (VC) funds is:"
+    choices:
+    - content: "Angel investors get to appear on *Shark Tank*."
+      isCorrect: false
+      explanation: "Incorrect. The main difference has more to do with how money is invested, not the public appearances of the investors."
+    - content: "VCs only invest in software startups."
+      isCorrect: false
+      explanation: "Incorrect. A VC often focuses on one or more specific sectors, but VCs aren't limited to software startups."
+    - content: "Angels invest their own money, while VCs invest mostly other people's money."
+      isCorrect: true
+      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."
+    - content: "Angel investors generally don't expect to receive a financial return."
+      isCorrect: false
+      explanation: "Incorrect. Like any other type of investor, angel investors look for a healthy rate of return on all their investments."
+
+  - 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:"
+    choices:
+    - content: "Friends and family."
+      isCorrect: true
+      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."
+    - content: "Angel investors."
+      isCorrect: false
+      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."
+    - content: "VC funds."
+      isCorrect: false
+      explanation: "Incorrect. Generally, VC funds consider investing only after a startup launches a product, generates early traction, and can demonstrate product-market fit."
+    - content: "The stock market."
+      isCorrect: false
+      explanation: "Incorrect. Investors put money into the stock market. The stock market isn't a source of funding for startups."
+
+  - content: "Which of these topics is the only one an investor is likely to cover in due diligence?"
+    choices:
+    - content: "Employment contracts including terms of IP assignment."
+      isCorrect: false
+      explanation: "Incorrect. Due diligence covers employment contracts, but it's not the only topic."
+    - content: "Previous investments, including any friends and family round that the company has raised."
+      isCorrect: false
+      explanation: "Incorrect. Due diligence covers previous investments, but it's not the only topic."
+    - content: "Disputes with previous employees."
+      isCorrect: false
+      explanation: "Incorrect. Due diligence covers disputes with previous employees, but it's not the only topic."
+    - content: "Loans from the founders to the company."
+      isCorrect: false
+      explanation: "Incorrect. Due diligence covers loans from founders to companies, but it's not the only topic."
+    - content: "All of the above."
+      isCorrect: true
+      explanation: "Correct. Due diligence covers employment contracts, previous investments, disputes, and loans, among other topics."
+

learn-pr/startup/fundraising/includes/3-investor-types.md

@@ -16,8 +16,8 @@ This arrangement can have a profound effect on your relationship with that perso
 
 Tips for raising money from friends and family:
 
-- Before any investment is made, discuss expectations. Ensure that you agree on the likelihood of success and failure, time frames, and how the company will be run.
-- Agree on a reasonable valuation. For example, your uncle might not have a grasp on startup valuations. While it might be tempting to set a high valuation, this might cause trouble when you raise your next round from more sophisticated investors.
+- Before any investment is made, discuss expectations. Ensure that you agree on the likelihood of success and failure, time frames, and how the company should be run.
+- Agree on a reasonable valuation. For example, your uncle might not have a grasp on startup valuations. While it might be tempting to set a high valuation, it might cause trouble when you raise your next round from more sophisticated investors.
 - Have a legal agreement that sets out the terms of the investment. Is it an equity investment, a loan, or a gift? How will the investor be compensated? What happens if the company fails? What input, if any, will they have?
 - Make sure the person can afford to lose their investment.
 
@@ -40,13 +40,13 @@ Tips for raising money from angel investors:
 
 ## Venture capital
 
-VC funds are professional investment firms managed by general partners who have often been successful entrepreneurs themselves. VC funds generally invest money provided by institutional investors like limited partners such as pension funds. These investors allocate funding to VC firms as part of their diverse portfolio of investments.
+VC funds are professional investment firms managed by general partners who were often successful entrepreneurs themselves. VC funds generally invest money provided by institutional investors like limited partners such as pension funds. These investors allocate funding to VC firms as part of their diverse portfolio of investments.
 
 Some VC funds invest at seed stage, but it's more common for them to invest at Series A and beyond. They normally invest larger amounts than is typical for angel investors.
 
 Most VC firms have a 10-year lifespan. They go through distinct phases:
 
-- Investment sourcing and investing, usually in the first five years.
+- Sourcing investments and investing, usually in the first five years.
 - Managing investments and supporting portfolio companies.
 - Making follow-on investments.
 - Exiting investments.
@@ -55,26 +55,26 @@ It's important to know where a VC fund is in its life cycle. There's little poin
 
 VC funds generally have a preferred investment stage, like seed, Series A, and Series B. They also often focus on one or more specific sectors, such as blockchain, AI, and health tech.
 
-Generally, VC funds will consider investing in a startup only after it has launched a product, generated early traction, and can show strong evidence of product-market fit. At this point, it's common for the company's growth to be limited by capital rather than by customer demand. The funding allows the company to rapidly accelerate customer acquisition and growth.
+Generally, VC funds will consider investing in a startup only after it launches a product, generates early traction, and can show strong evidence of product-market fit. At that point, it's common for the company's growth to be limited by capital rather than by customer demand. The funding allows the company to rapidly accelerate customer acquisition and growth.
 
 Tips for raising money from VC funds:
 
-- The preceding tips for angel groups also apply to VC funds.
+- Apply the preceding tips for angel groups, they also apply to VC funds.
 - Be prepared for multiple meetings and a time frame of several months from initial contact to investment close.
 - Have a comprehensive set of due-diligence resources assembled so that the fund can complete its due diligence without adding extra delays.
 
 ## Not all money is equally valuable
 
-Good investors can add significant value to your company by sharing their expertise and networks. They'll also provide guidance to the founders as they work on growing the business. Recognized investors, such as top-tier VC funds, will also add credibility by association. Their involvement might make it easier for you to raise subsequent funding rounds.
+Good investors can add significant value to your company by sharing their expertise and networks. They can also provide guidance to the founders as they work on growing the business. Recognized investors, such as top-tier VC funds, also add credibility by association. Their involvement might make it easier for you to raise subsequent funding rounds.
 
-There are investors who will add limited value, such as friends and family, as we discussed previously. There are also investors who add negative value.
+There are investors who add limited value, such as friends and family, as we discussed previously. There are also investors who add negative value.
 
 A good rule of thumb is that smart, involved money is better than dumb, passive money, which in turn is better than dumb, involved money.
 
 The benefits of smart money are clear. Smart money comes from someone who has relevant expertise. Being involved means they're willing to commit meaningful time to helping you grow your company.
 
 Dumb money comes from people who don't know much about your business or about how startups work. Being passive means they're prepared to take a back seat, and they have no ambitions to contribute to running your company. Dumb, passive money is fine if you have access to other sources of experienced guidance and the investment is on general terms.
 
-Dumb, involved money is problematic. It comes from people who don't have much value to contribute, but who insist on having an active role in your company. Sometimes dumb, involved money comes from inexperienced angel investors who have created wealth in other sectors, such as retail or property investing, and want to try their hand at angel investing.
+Dumb, involved money is problematic. It comes from people who don't have much value to contribute, but who insist on having an active role in your company. Sometimes dumb, involved money comes from inexperienced angel investors who created wealth in other sectors, such as retail or property investing, and want to try their hand at angel investing.
 
-It's wise to avoid these investors. Experience has shown that the challenge of managing their involvement frequently outweighs the benefit of the capital they provide.
+It's wise to avoid these investors. Experience shows that the challenge of managing their involvement frequently outweighs the benefit of the capital they provide.