UzCombinator
UZ
EN
Startup School
Curriculum0/19
Module 1
Idea and problem
  1. 1What a startup is, and how it differs from a small business4 min
  2. 2Finding a real problem4 min
  3. 3Judging an idea: market, timing and team4 min
  4. 4Co-founders and the team4 min
Module 2
Customers and validation
  1. 5How to run a customer interview5 min
  2. 6Who your first users are4 min
  3. 7Testing demand cheaply5 min
Module 3
Building the MVP
  1. 8What an MVP is, and what it is not4 min
  2. 9Building fast: code, no-code and ready-made tools4 min
  3. 10Launching and collecting feedback4 min
  4. 11Signs of product-market fit4 min
Module 4
Growth and metrics
  1. 12Choosing the metric that matters4 min
  2. 13Unit economics: CAC, LTV and margin4 min
  3. 14Your first growth channels4 min
  4. 15Keeping your users4 min
Module 5
Fundraising and pitching
  1. 16Do you need funding? Stages and sources4 min
  2. 17Building a pitch deck4 min
  3. 18Meeting investors4 min
  4. 19Terms and valuation basics4 min
Module 5Lesson 164 min

Do you need funding? Stages and sources

Fundraising and pitching
Your own money, grants, angel investors and venture funds: what each is for and when it fits.
Raising investment is often seen as a sign of startup success. In fact it is not a goal but a tool: money to speed up growth. Investment has a price: part of the company, a lot of time and new obligations. So the first question should not be "how much do we raise?" but "do we need it at all?"

When you need investment

  • When growth needs more money than your revenue provides, for example to expand the team quickly or enter a new market.
  • When the window of opportunity is short, and if you grow slowly someone else may take the market first.
  • When building the product requires a big upfront investment before revenue arrives, for example complex technology or equipment.
If your product earns money from the start and you can grow steadily on your own revenue, the path without investment is a worthy choice too. The company stays entirely yours, and you make the decisions.

Sources of money

  • Your own savings and revenue. The cheapest money: you give no shares to anyone. The downside is that your growth rate is capped by your revenue.
  • Friends and family. Often the first outside money comes from here. Be careful: say openly that they might lose it and put the agreement in writing, or relationships can suffer.
  • Grants and government or international programmes. They may not ask for shares, but they usually come with reporting and conditions. Check current programmes and their terms with official sources.
  • Accelerators. Programmes such as UzCombinator offer mentoring, a network and sometimes investment. Read each programme's terms carefully.
  • Angel investors. Experienced individuals who put their own money into early-stage companies. They often bring advice and introductions along with the money.
  • Venture funds. Organisations that manage money from many investors and invest in companies with high growth potential. They expect big outcomes and want the company to grow fast.

Stages

Round names vary from market to market, but the general logic is this:
  • Pre-seed. The idea and first-version stage. The money is for building the product and finding the first customers.
  • Seed. There is a product, first customers and signs of growth. The money is for reaching product-market fit and growing the team.
  • Later rounds. For scaling a model that works. Here investors expect clear numbers and repeatable growth.
At each stage investors ask different questions. Early on they look more at the team and the problem; later, at the numbers.

How much to ask for

A good rule: ask for enough to get the company to its next important milestone, plus a buffer. That milestone should be a result that makes the company noticeably more valuable, such as a specific level of revenue or a certain number of active customers. Ask for too little and the money runs out before you get there. Ask for too much and you give away more of the company than necessary, or struggle to find investors.
Always know how much you spend each month and how many months your remaining money will last. That number is one of your most important metrics.

The survival question

Ask yourself: if no more investment came, could we reach profitability with the money we have and our current growth rate? If the answer is yes, you are stronger in negotiations, because you do not depend on investors. If it is no, you need to review your costs or start raising earlier.

How long it takes

Raising money usually takes longer than expected: several months can pass between the first meeting and the money arriving in your account. So start before your money is nearly gone, not when it is. A founder who is running out of cash is in a hurry, which weakens them in negotiations and can push them into accepting poor terms. The company also has to keep growing during the process, because that growth is exactly what investors are watching.

Try this

Work out your monthly costs and how many months your remaining money will last. Write down your next important milestone as one specific result. Estimate how much money and time it will take to get there, and which source of money is right for it.