Why founders should choose pre-money SAFE agreements

🔥 Why Does Startup Funding Take Forever? 😩💸 (And why every founder ends up half bald, half broke & fully frustrated by the end!) Let’s be honest if there’s one universal truth every founder, VC, Angel investor agrees on. It’s that funding takes forever. You start with an exciting pitch 💬 great call, good vibes, strong traction. Everyone says, “We’ll move fast.” And then.. silence. 🕵️♂️ Days turn into weeks. Weeks into months sometimes years & that same “fast-moving” deal is still in discussion after 6 - 9 months. Sound familiar? 😅 💼 Phase 1: The Initial High 🎉 You nailed the pitch. Investor says, “We love it!” You celebrate. Your team plans expansion. But the truth? Interest ≠ Commitment. Most VC funnels look like this: 100 decks reviewed → 20 discussed → 5 serious → 1 gets a term sheet. So even if you’re “in,” you’re just one of many waiting in line. 📊 ✍️ Phase 2: The Term Sheet Mirage Finally after an eternity TERM SHEET ATTACHED. It feels like you made it. Champagne time! 🍾 But that’s just the start of the real pain. 😵💫 Now comes: Legal, financial & compliance DD (each with 500+ questions) Clause debates Escrow setup Endless sign-offs Every step adds weeks. 🧠 Phase 3: Due Diligence,The Black Hole 🕳️ This is where time disappears. Legal asks for 500 docs. Finance asks 500 more. Then compliance calls. Then a partner goes on leave Then the LP wants to reconfirm allocation. Boom another 6 months gone. Meanwhile, the startup’s runway shrinks & patience runs out. 💣 Why It Really Takes Forever 1️⃣ Funds don’t always have cash ready. LP drawdowns take 4–12 weeks. 2️⃣ Legal teams slow everything down. Every comma in SHA turns into a war. ⚖️ 3️⃣ Funds fear bad press more than bad startups. So they overcheck everything. 4️⃣ Decision fatigue. Everyone “moves fast” until it’s time to wire money. 💸 ⚙️ What’s In & Out of Control ✅ Founders can: Keep data room clean. Be transparent. Follow up consistently. ✅ Investors can: Communicate honestly. Respect founders’ time. ❌ Nobody controls: LP delays Legal redrafts KYC issues Market sentiment ❤️ The Emotional Side Founders lose morale. VCs lose patience. Everyone loses hair. 👩🦲 It’s not lack of intent it’s a broken process. We all say “we move fast”,but the system moves like SNAIL. 🚀 When It Finally Hits After months or year of chaos…that magical SMS: “Amount credited.” 💳 All the sleepless nights suddenly feel worth it. Because that’s not just money, it’s validation. 🔥 💬 My Take Funding delays aren’t just about money they’re about trust, process & patience. If you’re a founder- hang in there. If you’re a VC - communicate better. If you’re an LP- respect urgency. Because capital delayed isn’t capital denied it’s just stuck in the system we built. Drop a DM🔥 if you’ve been ghosted mid-diligence, 💸 if your term sheet took months, 🙃 if you’re still waiting. Let’s talk about it because Founding is hard enough Funding shouldn’t feel like a lifetime sentence.

Early-stage founders often get stuck on one question that can define their startup’s future: Should I raise funds through a SAFE or a Convertible Note? Pick the wrong one—and you might give away too much equity, lose investor confidence, or stall your next funding round. Many entrepreneurs rush through the decision without understanding how these instruments shape ownership and control. The goal is to help founders select the right instrument for their stage and align with investor expectations. You’ll learn how each works, its legal and financial implications, and when one structure is better suited than the other. By understanding the key differences between SAFEs and Convertible Notes, you’ll: - Protect your equity and investor relationships - Speed up your fundraising process - Build confidence when negotiating early capital rounds - Signal to investors that you understand the mechanics of venture financing I’m Gary Rushin, CPA, founder of Gary Rushin Unplugged and WealthE Skool. After decades of guiding startups, CFOs, and investors, I’ve learned this: great founders don’t just chase funding—they master the financial tools that shape their destiny. Join WealthE Skool to learn how to build governance, financial fluency, and investor readiness that fuels long-term success.

The Power Law: Why VCs Bet Big 🚀 Forget everything you think you know about "playing it safe" in investing. The venture capital world operates on a brutal mathematical truth: The Power Law. Unlike the comfortable bell curve that governs height or test scores, start-up returns follow an extreme distribution where outliers don't just beat the average - they obliterate it. The Numbers Don't Lie Just 5% of startup deals once generated 60% of all returns for top VC firms like Horsley Bridge. The best investment in a successful fund often equals or outperforms the rest of the fund combined. A single "grand slam" can return 1,400x the initial investment; don't believe me? Look up Vinod Khosla's bet on Juniper Networks to see how $5M turns to $7B at exit. When Mr. Khosla heard Patrick Brown's pitch to "eliminate the meat industry" with Impossible Foods, most would have called it crazy. Khosla's reaction? "If there's a one-in-a-hundred chance this works, it's a shot worth taking." This isn't recklessness - it's pure Power Law logic. VCs understand this - you can only lose 1x of your money on any failed investment. But the upside? Potentially unlimited. This mathematical asymmetry forces a counterintuitive strategy: Hunt for the impossible. Bet on the unreasonable. Chase the outliers. Because in a Power Law world, the only thing that truly matters is owning a piece of the next outlier that will redefine an entire industry. Many investments will fail. But those rare grand slams don't just pay for the failures - they fund the next generation of impossible dreams. What's your take on this? Would you be willing to back something absolutely crazy? Or do you play it safe.. Share your thoughts below! 👇 #VentureCapital #PowerLaw #Startups

Co-founders’ Agreement Template for Startup Founders I have seen that initially most of the startup founders don’t have an agreement in place between the Co-Founders. An agreement between co-founders is crucial as it clarifies roles, responsibilities, equity splits, and decision-making processes, preventing conflicts and ensuring alignment. It provides a clear framework for handling disputes, exits, or changes, safeguarding the business and maintaining trust among founders. This agreement covers all the areas related to: 1. Roles & Responsibilities 2. Equity Distribution 3. Vesting Schedule 4. Intellectual Property Rights 5. Time Commitment 6. Compensation 7. Confidentiality and Non-Disclosure 8. Non-Compete and Non-Solicitation 9. Dispute Resolution 10. Exit Provisions(Voluntary and Involuntary) 11. Death or Incapacity Clause 12. Future Funding Expectations 13. Expenses and Reimbursement Policy 14. Amendment Process 15. Representation and Warranties 16. Termination of Agreement 17. Severability 18. Governing Law and Jurisdiction Finally, always suggest that please take assistance from a lawyer for preparing this type of important document. Credit: @EWOR ~~~~~ ♻️ Found this helpful? Repost it so your network can learn from it, too. And follow me, Fazlur Shah, for more content like this. #startups #entrepreneurship #venturecapital #investing

💥 Recommended Post for #Startup: If you’re starting up with a Co-founder, you’re going to need a water tight Agreement. This one herein looks like a Silicon Valley standard #Cofounder agreement to work with as a template. However, under no circumstances whatsoever should you use it or sign anything without consulting a startup lawyer. By that I mean a law firm who specialises in working with startups. So make sure you due dil the law firm or solo lawyer as well. Keep records of your written correspondence with your lawyer should you both need to reference it for xyz reasons. Thanks for sharing this document Fazlur Shah 🤓 Morpheus thinks 🌿

There’s a subtle but powerful shift happening in private equity right now. 💼 Five years ago, funds would buy almost anything that moved—hyped startups, flashy deals, even companies that barely made sense. Fast forward to today, and suddenly those “sure things” are being passed over. Why? Because due diligence is back in style. Numbers, discipline, fundamentals—the old rules are winning again. This is a wake-up call for every entrepreneur: when money is cheap, it’s easy to look smart. Anyone can raise cash, inflate projections, and convince people they’re winning. But when money gets expensive, when investors tighten up, only the builders who understand discipline, fundamentals, and sustainable growth survive. This isn’t just a lesson for PE—it’s a blueprint for business. Build with rigor. Know your numbers. Stay disciplined. Because luck and hype fade fast. Fundamentals endure. 🔑 #EntrepreneurMindset #BusinessDiscipline #SustainableGrowth

𝐇𝐨𝐰 𝐭𝐨 𝐍𝐚𝐯𝐢𝐠𝐚𝐭𝐞 𝐚 𝐂𝐨-𝐟𝐨𝐮𝐧𝐝𝐞𝐫 𝐄𝐪𝐮𝐢𝐭𝐲 𝐒𝐩𝐥𝐢𝐭 𝐒𝐮𝐜𝐜𝐞𝐬𝐬𝐟𝐮𝐥𝐥𝐲 🤝📊 One of the hardest—and most important—decisions early founders face is how to divide equity fairly. Get it right, and you set your startup up for long-term alignment. Get it wrong, and you risk conflicts, demotivation, or even losing investors’ trust. The good news? Equity splits don’t have to be guesswork. With the right framework, you can build fairness, accountability, and stability into your founding team from day one. 𝐈𝐧 𝐭𝐡𝐢𝐬 𝐛𝐥𝐨𝐠, 𝐰𝐞 𝐜𝐨𝐯𝐞𝐫: 📌 Common mistakes founders make in equity distribution—and how to avoid them ⚖️ Key factors that should guide your split (time, risk, contributions, and more) 📝 Legal essentials: vesting, cliffs, buybacks, and documentation 💼 Models for structuring equity fairly—equal, role-based, dynamic, and slicing pie 👉 𝐑𝐞𝐚𝐝 𝐭𝐡𝐞 𝐟𝐮𝐥𝐥 𝐛𝐥𝐨𝐠: https://lnkd.in/gtjfz4Bi #EquitySplit #StartupFounders #CapTable #Qapita

What investors actually look for (after watching 100+ pitches get rejected) Spoiler: It's not your fancy deck They're testing for delusion, not vision When VCs grill you for 2 hours on unit economics, they're not impressed by your memory. They want to know: Are you lying to yourself? I watched founders with perfect decks crumble when asked basic questions about CAC or burn rate. Meanwhile, founders who knew their numbers cold - got checks. Your track record is your real pitch deck VCs will stalk you back to 2009. They'll find every failed startup, every pivot, every community you built. One investor told me: "I'm not betting on your idea. I'm betting on what you'll do when this idea fails." Show me 10 years of not quitting, and I'll show you someone who gets funded. They're evaluating your marriage, not your startup 98% of startups fail. Most die from founder breakups, not market conditions. Smart investors watch how co-founders interact. Do you interrupt each other? Can you disagree respectfully? One VC told me they rejected a promising startup because the founders couldn't make eye contact during the pitch. They want builders who've danced on broken stages Every African entrepreneur knows this dance: Building infrastructure while using it. When investors see you've thrown 40,000-person concerts with generators because the grid failed, they know you'll figure it out when AWS crashes. Pattern-matching kills African innovation** VC: "What's your path to a billion-dollar valuation?" Founder: "I'm connecting rural farmers to urban markets." VC: "But how does this scale like Uber?" They're evaluating zebras using unicorn metrics. The best African businesses won't fit their frameworks because we're building infrastructure, not apps. Your "no" collection is your credibility I pitched TalentBase after multiple failures. Got funded. Why? Serial failure in Silicon Valley gets you funded. In Africa, we hide it. Stop that. Your failures are your MBA. They fund relationships, not spreadsheets Our first million? All from people we'd known for 10+ years. That coffee chat in 2016? It became a check in 2022. Investors back people they've watched evolve, not strangers with good PowerPoints. They're looking for builders, not beggars Never announce you're fundraising. Create FOMO. We closed in 3 weeks acting like we didn't need them. Desperation smells worse than failure. The brutal truth? Most founders perfect their pitch deck when they should be perfecting their ability to execute without permission. Those years building in the dark, when the money's running out and nobody's watching? That's where real companies are born. Not in accelerators. Not in pitch competitions. In the trenches. What's the harshest truth about fundraising you've learned? If this post resonated with you share with your network!

What I’m Learning About Pitching (and Why This Hit Home) I’ve been deep in the practice of refining my pitch lately—both for competitions and for real-world conversations about Brilliant Corners. And this post by Chika Uwazie 🪞 stopped me in my tracks. She’s absolutely right: investors (and honestly, people in general) fund relationships, not spreadsheets. They back people who can execute, not just present. What I’m learning is that clarity and confidence come from doing the work—knowing your numbers, your story, your “why,” and your market cold. The deck matters, but the delivery is in how you show up. I’m still early in this journey, but every pitch practice, feedback session, and late-night rewrite is building that muscle. Posts like this remind me that it’s not about pretending to have it all together—it’s about showing that you’re building something real. If you’re a founder, creative, or builder, read this twice. #founderjourney #clarity #buildinginpublic #pitchpractice #leadership #brilliantcornersinnovations

You don’t need to write a $50k or $100k check to invest directly in a startup. I’ve written tons of $5k and $10k checks. Here’s how it works… Starting out, I did all syndicate investments, paying 20% carry each time. Now, most of my investments are direct. When I made my first direct investment, I was intimidated. It sounded mysterious and difficult. But it’s not. It all starts with finding the right startup and getting a spot in the round. *How I Get a Spot, Even as a Little Guy* I’m upfront with founders about check size. If they only want huge checks, I’m not the investor for them. When I meet a startup I love, I help them as much as I can. I make a bunch of intros to VC’s, helping them line up meetings. I also tell the founder exactly why I love their company. Take Nick at Verustruct. His 3D printing robot will build the homes to solve the housing crisis. That’s incredibly exciting! The founder sees I can help him. He also sees that I care about the mission. Helpful investors who care about the mission — that’s what founders want. So although my checks aren’t huge, I rarely miss a deal. *How The Investment Works* On the settlement date, the founder sends me the paperwork and wiring information. I e-sign the paperwork and wire the money. It’s very simple and takes maybe half an hour. I confirm they got the money, in case the bank messes up. *But What About Legal Fees?* Early on, I heard you couldn’t invest less than $50k directly because of legal fees. This isn’t true. At pre-seed and seed, everyone raises on SAFEs. All documents are standard. I run the docs through an LLM to be sure I’m signing a standard SAFE. I haven’t incurred any legal costs doing deals. Neither have other angels I know. *Wrap-Up* Small investors absolutely can invest directly. It’s not difficult. Many great founders will be happy to have you. I still invest through syndicates too, paying 20% carry for the privilege. I want the best deal, wherever it comes from. But I’m no longer afraid to go direct. And if I save that 20%, even better!