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Houston, long known as the energy capital of the world, is rapidly emerging as a vibrant startup ecosystem that's attracting ambitious founders and venture capital investment. While the city's entrepreneurial roots run deep in energy and healthcare, a new wave of innovation is transforming Houston into a diverse technological hub that spans industries from cleantech to digital transformation. In 2024, Houston's startup scene reached several significant milestones, with local startups raising over $1.2 billion in venture funding. This growth reflects the city's unique advantages: a lower cost of living compared to coastal tech hubs, access to major corporate headquarters, world-class research institutions, and a deep talent pool enriched by technical expertise from the energy and medical sectors. For founders navigating Houston's funding landscape, understanding the local venture capital ecosystem is crucial. This comprehensive guide maps out the city's most active and influential venture capital firms, while providing actionable insights for fundraising success in the Houston market. Whether you're launching a seed-stage startup or scaling a growth-stage company, you'll find the resources and connections needed to advance your fundraising journey. Top 15 Venture Capital Firms in Houston 1. Mercury Fund About: Mercury is an early-stage venture capital firm partnering with entrepreneurs to drive innovation across Middle America. Mercury’s investment themes target B2B SaaS and B2B2C marketplace platforms enabling the digital transformation of markets, industries, and customer relationships. With $750M under management, Mercury has created over $9 billion of value with an operationally focused investment strategy helping startups achieve rapid, sustainable growth. Mercury is headquartered in Houston with offices in Austin, Texas and Ann Arbor, Michigan. 2. Chevron Technology Ventures About: Chevron’s Core Venture Fund invests in technologies that have the potential to add efficiencies to Chevron’s core business in the areas of operational enhancement, digitalization and lower-carbon operations. Chevron’s first Core Venture Fund was launched in 1999. Now in our seventh fund, we have invested in more than 100 companies with more than 150 other investors. Thesis: CTV engages a range of startup companies, investors, incubators and accelerators to access technology that can be used across Chevron now and in the future to enable us to operate more efficiently, to lower the carbon intensity of our operations and launch viable new businesses. 3. The Artemis Fund About: The Artemis Fund seeds tech innovators modernizing wealth. Sweetspot check size: $ 1.50M Thesis: Investing in female founders in fin-tech, care-tech, and e-commerce enablement. 4. Goose Capital About: Goose Capital is an investment firm comprised of former Fortune 500 executives, industry leaders, and serial entrepreneurs. We invest in breakthrough technologies and innovative founders. 5. Houston Ventures About: Houston Ventures focuses on technology opportunities that solve operational problems in the energy and power industries. These technologies often are used in other industries to drive incremental revenue or deliver cost reductions, but have not made the transition to the energy and power sectors. 6. Texas Atlantic Capital About: TAC invests in Europe and the USA. We invest in all stages (seed, early and growth) of companies with exceptional teams and scalable business models. Our investment sizes go from $500,000 for seed stage to $30 million for growth stage. We like opportunities in deep tech, e-commerce, media, and software domains. 7. Golden Section About: Golden Section exists to journey together with B2B software founders to achieve meaningful exits through flourishing communities, effective partnership, and a commitment to balance. 8. Seed Round Capital Sweetspot check size: $ 100K Traction metrics requirements: Product in market with $5k MMR or $100k ARR in revenue. Thesis: Product in market with $5k MMR or $100k ARR in revenue. $10M or less Valuation. 9. Quantum Energy Partners About: Founded in 1998, Quantum Capital Group is a leading provider of private equity, credit, and venture capital to the global energy and energy transition industry, having managed together with its affiliates more than $28 billion in capital commitments since inception. Quantum pursues a disciplined yet creative approach to investing across the entire energy value chain, including: oil and gas, energy infrastructure, renewable power, decarbonization, and energy & sustainability technologies. We strive to add value to the entrepreneurs with whom we partner through strategic, technical, operational and digital support. 10. Knightsgate Ventures About: Knightsgate Ventures is an early-stage venture capital firm that invests in mission-driven startups to build a future that is sustainable, equitable, inclusive, and diverse. Thesis: We invest early in ideas and people that are looking to create positive change through tech innovation We are sector agnostic investors and we partner with the best startups across sectors. All products and services we invest in are bringing innovative ideas to their industries making the world a place we want to live in while creating significant financial and social value. 11. SpaceFund About: SpaceFund is a Venture Capital firm focused on supporting and investing in the growth of the space economy. Our team has the extensive industry experience and a strategic investment approach. By backing innovative ventures and leveraging our portfolio, we aim to drive the development of the space industry and generate solid returns for our investors. Our focus is on building a sustainable future for space exploration and improving people's lives on Earth and beyond. If you are interested in supporting the space industry's growth and exploring potential investment opportunities, we welcome the opportunity to speak with you. 12. HX Venture Fund About: HX Venture Fund is a venture capital fund of funds that creates a multiplier effect by linking the transformational power of world-class corporations, technology innovation, and high-growth startups with proven venture investment talent, company-building expertise, and capital. 13. Amnis Ventures About: Amnis Ventures is a broad range investment firm focused on innovative technologies in many fields of use that deliver sustainable results. Investments have included energy-related specialty chemicals, innovative hardware technologies in renewable energy, novel democratised block-chain based financial services platform and sustainable real estate development. 14. Texas HALO Fund About: Texas HALO Fund is an investment company specializing in diverse, early stage businesses with promising growth prospects and exceptional management teams. Our investment approach identifies compelling businesses from multiple sources without regard to industry or geographic location. Quite simply, we seek the best opportunities, locally, regionally and nationally, in order to generate the highest returns for our investors with the lowest possible risk. Each fund invests in multiple companies in a variety of industries in order to construct a diversified portfolio. Our process involves rigorous due diligence and extensive interaction with management prior to making a capital commitment and then active on-going oversight, often through board positions or board observation rights. Texas HALO Fund was created to give investors access to the high return potential of early-stage investments while addressing the unique challenges that confront investors attempting to create a diversified portfolio, such as quality deal flow, due diligence expertise, and limited capital to spread among the many investments needed in a diversified portfolio. 15. Texas Ventures About: Texas Ventures is a private equity and venture capital firm with expertise in structured finance, capital markets and technology. Thesis: Our investment approach is to identify emerging trends and opportunities prior to recognition by the broader marketplace, and to take a proactive approach in working with entrepreneurs and managers who have the desire, talent and determination to build world-class companies. Houston's Startup Ecosystem Overview Houston's transformation into a technology hub builds upon its traditional strengths while embracing new opportunities. The ecosystem benefits from several key advantages that make it an increasingly attractive destination for founders: Industry Leadership and Innovation Houston's startup ecosystem leverages its established leadership in key sectors: Energy and Cleantech: The city's energy expertise is driving innovation in renewable energy, carbon capture, and sustainable technologies Healthcare and Life Sciences: The Texas Medical Center, the world's largest medical complex, spawns numerous healthtech and biotech startups Space Technology: NASA's Johnson Space Center anchors a growing space technology sector Industrial Technology: Digital transformation of traditional industries creates opportunities for B2B software and IoT solutions Infrastructure and Support Houston's startup ecosystem is built on a foundation of world-class infrastructure and support systems that give founders the resources they need to succeed. At the heart of this is a network of innovation districts, accelerators, and research institutions working together to drive technological advancement. The Ion, Houston's flagship innovation hub, has transformed a historic Midtown building into a 266,000-square-foot entrepreneurial hub. In addition to modern office space, The Ion hosts numerous startup development programs, corporate innovation initiatives, and networking events that help founders and investors connect. The surrounding Innovation District has attracted major technology companies and startups, creating a density of talent and opportunities. Houston's accelerator programs offer founders structured pathways to growth. MassChallenge Texas provides equity-free funding and mentorship to early-stage startups focusing on energy, healthcare, and space technologies. The Texas Medical Center's TMCx program gives healthcare startups access to the world's largest medical complex and member institutions. Greentown Labs, North America's largest climate tech startup incubator, chose Houston for its second location, offering specialized resources for clean energy entrepreneurs. The city's academic institutions play a vital role in fueling innovation. Rice University's Liu Idea Lab for Innovation and Entrepreneurship (Lilie) offers entrepreneurship education and startup support, while its Rice Alliance for Technology and Entrepreneurship has helped launch over 2,000 startups that have raised more than $8.1 billion in funding. The University of Houston's Technology Bridge provides lab space and commercialization support for deep-tech startups, particularly in energy and advanced materials. Texas Southern University also contributes to the talent pipeline through specialized technology and entrepreneurship programs. Organizations like Houston Exponential act as ecosystem connectors, while specialized facilities like the East End Maker Hub provide prototyping and manufacturing resources for hardware startups. Competitive Advantages Houston offers founders unique advantages that directly impact startup growth and sustainability. The cost advantage is significant. Office space and operating costs are 45% lower than in San Francisco, and the median home price is approximately one-third of Bay Area levels. This translates to a longer runway for startups and a better quality of life for team members. There is also no state income tax, further strengthening the financial equation for companies and employees. The intersection of energy, healthcare, and technology sectors creates a workforce that understands complex industries and regulatory environments. The city's international community adds global perspective and connections. The proximity to Fortune 500 headquarters provides opportunities for B2B startups. Over 20 major corporations have offices in Houston, with active startup partnership programs. Companies like Shell, Memorial Hermann Health, and HPE regularly engage with local startups through pilot programs and strategic partnerships. Connect With Investors in Houston Using Visible At Visible, we often times compare a fundraise to a B2B sales and marketing funnel. At the top of your funnel, you are finding new investors. In the middle, you are nurturing and pitching potential investors. At the bottom of the funnel, you are working through diligence and ideally closing new investors. With the introduction of data rooms, you can now manage every aspect of your fundraising funnel with Visible. Find investors at the top of your funnel with our free investor database, Visible Connect and find a filtered list of Houston's investors here. Track your conversations and move them through your funnel with our Fundraising CRM Share your pitch deck and monthly updates with potential investors Organize and share your most vital fundraising documents with data rooms Manage your fundraise from start to finish with Visible. Give it a free try for 14 days here.

As a venture capital investor, you know that clear, actionable portfolio insights can mean the difference between informed decisions and missed opportunities. That’s why we created Our Guide to Portfolio Reports in Visible — a comprehensive resource to help you streamline how you visualize, analyze, and communicate insights about your portfolio companies. In this guide, you’ll discover: Common metrics that top VC firms track, such as Revenue, Cash Balance, and Runway. Segmentation strategies that enable deeper analysis by Fund, Market, or Partner. How to use Visible Portfolio Reports to consolidate portfolio data into one view. Examples of portfolio reports showcasing real-world insights from leading firms. Join 590+ venture capital funds already using Visible to uncover insights, fill reporting gaps, and make data-driven decisions faster. Are you ready to take your portfolio reporting to the next level? Download the guide below:

San Diego has rapidly emerged as a dynamic hub for startups, blending innovation with a high quality of life. Known for its thriving biotech and health tech industries, the city is also gaining recognition for cleantech, SaaS, and other forward-looking sectors. With its proximity to world-class research institutions like UC San Diego and Scripps Research, as well as a growing network of accelerators and incubators, San Diego provides fertile ground for startups to launch and scale. In this article, we will highlight the top 10 VCs investing in startups in San Diego and provide insights into the local startup ecosystem and fundraising landscape. The Startup Ecosystem in San Diego San Diego's startup ecosystem is a vibrant and supportive environment for entrepreneurs, offering a wealth of resources, accelerators, and incubators designed to foster innovation and growth. These organizations are just a few that contribute to a great support system for startups in the region: EvoNexus: As Southern California's leading startup technology incubator, EvoNexus provides entrepreneurs with mentorship, access to capital, and strategic partnerships to help transform ideas into viable companies. Connect: A premier innovation company accelerator in San Diego, Connect offers programs like Springboard, which provides startups with mentoring and access to a network of industry experts to accelerate their growth. Startup San Diego: A nonprofit organization serving as the gateway to the local startup ecosystem, Startup San Diego connects founders and talent to resources, networks, and support institutions, fostering a cohesive entrepreneurial community. BioLabs San Diego: A co-working space tailored for life science startups, offering shared lab space and equipment to support biotech entrepreneurs in their early stages. Hera Hub: A female-focused co-working space and business accelerator providing a collaborative environment for women entrepreneurs to grow their businesses. Benefits of Running a Startup in San Diego Operating a startup in San Diego offers several advantages: Talent Pool: The presence of leading research institutions like the University of California, San Diego (UCSD), and a strong military community provide a steady stream of skilled professionals in fields such as biotechnology, engineering, and information technology. Proximity to Research Institutions: Institutions like UCSD and the Salk Institute drive innovation and provide opportunities for collaboration, particularly in sectors like biotech and life sciences. Quality of Life: San Diego's favorable climate, beautiful beaches, and vibrant cultural scene make it an attractive location for talent, aiding in recruitment and retention for startups. Fundraising in San Diego Securing funding is a pivotal step for startups aiming to scale their operations. San Diego offers a unique fundraising landscape, with a variety of resources and events tailored to support entrepreneurs. Tips for Fundraising in San Diego Engage with Local Angel Investors: San Diego has a robust network of angel investors who provide critical early-stage funding. Organizations like Tech Coast Angels and the San Diego Angel Conference are prominent in this space. Tech Coast Angels, for instance, is one of the largest and most active angel groups in the US, offering funding and mentorship to startups across various industries. Participate in Pitch Competitions: Events such as the San Diego Angel Conference offer startups the opportunity to pitch to a network of over 200 angel investors. Winners receive investments of $200,000 or more. These competitions provide not only funding opportunities but also valuable exposure and feedback. Leverage Crowdfunding Platforms: For startups with consumer-facing products, crowdfunding can effectively raise capital while validating market demand. San Diego-based companies have found success on platforms like Kickstarter and Indiegogo. For example, OSSIC, a tech company developing headphones with 3D audio technology, raised over $2.6 million on Kickstarter, with almost 10,000 backers supporting the firm.  Network Strategically: Building relationships within the local startup ecosystem is crucial. Attend industry meetups, startup events, and networking opportunities to connect with like-minded individuals and potential investors. San Diego hosts many events geared towards entrepreneurs and investors, such as the annual Startup Week, which features workshops, panels, and networking opportunities. Networking and Local Startup Events San Diego's vibrant startup community offers numerous events that facilitate networking and learning: San Diego Startup Week: An annual premier conference that brings together entrepreneurs, investors, mentors, executives, and talent to connect, educate, and inspire the San Diego innovation ecosystem. The event is jam-packed with seminars, workshops, panel discussions, special events, and networking sessions aimed to foster an inclusive and collaborative community. March Mingle: San Diego’s largest annual startup and tech networking event, bringing together technologists from various local tech user groups to socialize and share ideas. Established in 2004, March Mingle is a platform for San Diego’s leading technologists to gather and socialize. Startup San Diego Events: Regular events such as 1st Mondays and specialized workshops provide platforms for entrepreneurs to connect, learn, and grow within the local startup ecosystem. Startup San Diego is a California 501(c)(3) nonprofit serving the San Diego Startup Ecosystem, guiding and connecting local founders and talent to the right resources, networks, and support institutions. San Diego Entrepreneurs Exchange (SDEE) Events: SDEE hosts a number of truly fantastic events, ranging from monthly happy hours to expert-led workshops and networking events, providing opportunities for entrepreneurial innovators to connect and learn. Comparing San Diego’s Investment Landscape While San Diego's startup ecosystem is rapidly growing, it differs from larger hubs like Silicon Valley and Los Angeles in several ways: Scale of Investment: Silicon Valley attracts more venture capital due to its established reputation and dense concentration of tech companies. However, San Diego is gaining traction, particularly in sectors like biotechnology, health tech, and clean energy, attracting significant venture capital and driving innovation across multiple sectors. Community and Accessibility: San Diego's startup community is known for its collaborative and supportive nature. It often provides more accessible networking opportunities than the competitive environments of larger hubs. Events like San Diego Startup Week and organizations like Startup San Diego significantly foster this community spirit. Cost of Operations: Operating a startup in San Diego can be more cost-effective than in Silicon Valley or Los Angeles, with lower living costs and operational expenses, making it an attractive option for early-stage startups. Top 15 Venture Capitalists in San Diego Tech Coast Angels About: Tech Coast Angels is the largest angel investor group in the United States, possessing more than 300 members in five networks in Los Angeles, Orange County, San Diego, Central Coast, and the Inland Empire. Its members provide funding and guidance to more early-stage, high-growth companies in Southern California than any other investment group. Sweetspot check size: $ 500K Traction metrics requirements: Yes. Usually investing after product market fit or defensible IP. Thesis: SoCal focused innovation companies Correlation Ventures About: Correlation Ventures is a new breed of venture capital firm, leveraging world-class analytics to offer entrepreneurs and other venture capitalists a dramatically better option when they are seeking additional capital to complete a financing round. Thesis: We provide fast and reliable access to venture capital so teams can spend less time fundraising and more time building their businesses. Qualcomm Ventures About: Qualcomm Ventures is the venture capital arm of Qualcomm Incorporated and is based in San Diego, California with several satellite offices located throughout world. Founded in 2000, Qualcomm Ventures is a corporate venture capital fund with over 150 active portfolio companies and more than 20 exits over a billion dollars, including 99 Taxis, Cruise Automation, Fitbit, Invensense, NQ Mobile, Waze and more. As a global investor, Qualcomm Ventures helps connect entrepreneurs to the resources, relationships and deep industry expertise they need to succeed in the mobile technology ecosystem. Thesis: The group is focused on early to late-stage investments in the mobile/wireless sector, with strong interests in 5G, IoT, Connected Automotive, AI, Consumer, enterprise, and cloud. Section 32 About: S32 is a venture capital firm investing at the frontiers of technology. Founded by Bill Maris, the team has vast experience building iconic companies. Our goal is to accelerate the discovery, development, and distribution of revolutionary technologies that improve the human condition. We invest across the entirety of technology. This includes artificial intelligence, enterprise software, cybersecurity, fintech, quantum computing, computational biology, and biotechnology. Offices in San DIego, San Francisco, and New York. Harpoon About: Harpoon Ventures is an early-stage venture capital firm with a deep commitment to supporting the next generation of groundbreaking technology. With $300 million in assets under management, we invest in a wide range of transformative ventures, including those in AI, deep tech, cyber security, and enterprise infrastructure. TVC Capital About: TVC Capital is an operator-led growth equity firm focused on investments in and acquisitions of software companies. We target a wide spectrum of software sectors and industry verticals that are poised for growth and consolidation. We invest growth equity in minority interests as well as provide capital for recapitalizations and buyouts. Thesis: TVC Capital seeks investment opportunities with US software companies generating $2.5 million plus in annual revenue. We typically invest in such companies that are at or tracking towards profitability, meet a mission-critical need of their customer base, and are in need of capital to accelerate their growth. We also welcome the opportunity to begin a dialogue with growth-oriented software companies that are below our revenue threshold, but are at an inflection point in their development and are poised for future growth. Forward Ventures About: Forward Ventures, founded in 1990, has a team of investment professionals with extensive experience in entrepreneurship, venture capital, biological sciences, operations, and corporate management. The most recent fund focuses on biopharmaceutical products in early clinical development. We maximize returns through capital efficiency in our portfolio companies. We use our financial, technical and business resources to support founders and management. On a number of occasions, we have seeded companies from scratch, building strong teams to pursue compelling opportunities. Spark Growth Ventures About: Spark Growth Ventures is a community driven, early & mid stage, vertical-agnostic, technology venture capital firm. Our mission is to support gritty and exceptional founders in their missions by bringing forth the combined value of our strong community. We are fortunate to have a global network of entrepreneurs, C-level relationships, subject matter experts, world-class talent, institutional investors, high net worth individuals and family offices, many of who are investors in our platform. Our team has several decades of global experience in venture capital, entrepreneurship, innovation, executive & board management, functional leadership and advisory work. Sweetspot check size: $ 1.50M Traction metrics requirements Post PMF with min. $1M in SaaS ARR or $4-5M in non SaaS annualized run rate. High capital efficiency and scalability metrics Thesis: Capital efficient and scalable business model rooted in tech enabled products and services solving real and large problems. Mission oriented and gritty founders are a must. Longley Capital About: We invest in meaningful companies at the forefront of emerging technologies. Focusing on underserved markets, we champion management teams with visionary ideas and nurture our investments with the quantitative and qualitative disciplines necessary to accelerate enterprise value and mitigate portfolio risk. We implement business fundamentals and control early in a company’s lifecycle in order to ensure success in later stages. Radical Growth About: We discover world-class entrepreneurs and emerging technologies changing food and agriculture. Many of our founders took part in the Radicle Challenge, our pitch competition. By bringing our expertise and network, we help entrepreneurs and large corporations positively impact the future of food.  Thesis: The Acceleration Fund solves some of the most pressing issues facing the earth today by reducing the time to bring the latest Ag technologies to market. The fund is focused on tackling global farming problems by investing and accelerating companies in the areas of Digital Ag, Biologicals, New Farm Systems and Seed Technology. Crescent Ridge About: Crescent Ridge invests in early-stage companies on a mission to build a better world. We want to back entrepreneurs solving deep problems that affect Health/People/Planet. We bring the rigor of institutional capital with the trust and closeness of family and friends. Versant Ventures About: Versant Ventures is a leading healthcare investment firm committed to helping exceptional entrepreneurs build the next generation of great companies. The firm’s emphasis is on biotechnology companies that are discovering and developing novel therapeutics. With $2.4 billion under management and offices in the US, Canada and Europe, Versant has built a team with deep investment, operating and clinical expertise that enables a hands-on approach to company building. Since the firm’s founding in 1999, more than 70 Versant companies have achieved successful acquisitions or IPOs. Founders First Capital Partners About: National lender serving BIPOC, veteran, LGBTQ+, & women-owned businesses, as well as businesses in LMI zones & those committed to diverse hiring practices. Helping accelerate business growth through our Revenue-Based Funding products & Advisory Services. Together, we can create more jobs, increase your revenues and bottom line, and provide more growth capital to help your business. We’re backed by the nation’s top philanthropic organizations, so that we can fund you with the right capital. Thesis: We help companies grow and scale through strategic advisory and revenue-based investment. Lolita Taub About: Lolita Taub is the Chief of Staff and interim Head of Sales at Catalyte, and a 2x TEDx speaker, with a venture capital and enterprise tech background. She is also Scout at Indie.VC, an investor at NextGen Venture Partners, an LP at Operator Collective and Portfolia’s Enterprise Fund; and a former VC at Backstage Capital and K Fund. Lolita holds over a decade of enterprise B2B software, hardware, and services sales experience at IBM, Cisco Systems and in Silicon Valley. She has a BA from the University of Southern California and an MBA from the IE Business School. Lolita has been recognized for her work on Forbes, Inc.com, The Huffington Post and Entrepreneur.com among other publications. Sweetspot check size: $ 20K FusionX Ventures About: FusionX Ventures is a Southern California-based venture capital firm that invests in promising, early stage startups in technology, industrial and medical/life science sectors. Connect With Investors in San Diego Using Visible At Visible, we often times compare a fundraise to a B2B sales and marketing funnel. At the top of your funnel, you are finding new investors. In the middle, you are nurturing and pitching potential investors. At the bottom of the funnel, you are working through diligence and ideally closing new investors. With the introduction of data rooms, you can now manage every aspect of your fundraising funnel with Visible. Find investors at the top of your funnel with our free investor database, Visible Connect and find a filtered list of San Diego investors here. Track your conversations and move them through your funnel with our Fundraising CRM Share your pitch deck and monthly updates with potential investors Organize and share your most vital fundraising documents with data rooms Manage your fundraise from start to finish with Visible. Give it a free try for 14 days here.

Denver has solidified its position as a rising hub for startup innovation and venture capital activity. Known for its dynamic entrepreneurial culture, diverse industry strengths, and access to a growing pool of skilled talent, the city has attracted both emerging startups and established investment firms. From technology and SaaS to clean energy and life sciences, Denver's thriving ecosystem offers opportunities for founders seeking capital to scale their businesses. In this article, we will explore the top venture capital firms actively investing in Denver, highlight the key industries driving innovation in the region, and showcase some of the most successful startups that have secured significant funding. Whether you're an early-stage founder or an investor exploring Denver's ecosystem, this guide will help you navigate the city's vibrant fundraising landscape. Top Venture Capital Firms in Denver Denver is home to a diverse range of venture capital firms actively investing in startups across multiple industries. Here's a list of some of the most prominent VCs in the region: 1. Stout Street Capital About: Stout Street Capital is a seed-stage fund that seeks to invest in early-stage companies focused on improving efficiency and generating bottom-line value in large established sectors in the market. Stout Street’s Value Fund-II is currently focused on post-revenue, seed-to-series-A investments in companies valued at less than $10 million. Stout Street’s Value Fund-I has invested in 36 companies by the end of 2018 and Stout Street Value Fund-II is projected to invest in 50 companies with an average initial investment of 100k by 2020. We usually reserve 500k-$1M in follow on investment for our portfolio companies. 2. SpringTime Ventures About: SpringTime Ventures seeds high-growth startups in healthcare, fintech & insurtech, and logistics & supply chain. We look for founders with domain expertise, forging a path with a truly transformative technology. We only invest in software-based businesses in the USA. We bring a people-focused approach, work quickly, and reach conviction independently. 3. Green Lion Partners About: Green Lion Partners is a Denver, CO based business strategy firm focused on early stage development in the regulated cannabis industry. Sweetspot check size: $ 3.30M Thesis: Empowering business through innovative professional practices 4. Konvoy Ventures About: Konvoy Ventures is a venture capital fund dedicated to esports & video gaming Sweetspot check size: $ 1.50M Thesis: We invest in the infrastructure technology, tools, and platforms of tomorrow’s video gaming industry. 5. LabStart About: LabStart is building accessible pathways for underrepresented entrepreneurs to bring climate technologies from lab-to-market. A trove of valuable, scalable climate technologies continues to sit dormant - untapped and hidden behind research institution walls. To unlock these ready-innovations in a way that generates equitable market opportunities for underserved communities, we match market-ready tech with talented entrepreneurs selected from the front lines of climate change. We are a team of entrepreneurs, national lab researchers, commercialization consultants, investors, and programmatic experts. We fund full-time entrepreneur-minded fellows to discover, build, and launch startups based on technologies developed in premier research laboratories. 6. KEY Investment Partners About: KEY Investment Partners is a venture capital firm focused on providing capital to early-stage cannabis companies. Sweetspot check size: $ 1M Traction metrics requirements: Over 1,000,000 annualized revenues 7. Blackhorn Ventures About: Blackhorn Ventures is an early stage venture firm that invests in capital-efficient companies redefining resource use, enabling the decarbonization of the toughest to transition sectors in our economy (Transportation, the Built Environment, Supply Chain, and Energy). Thesis: Blackhorn Ventures invests in world-class founders building digital infrastructure to redefine industrial resource efficiency. 8. Bigfoot Capital About: Debt capital for growing SaaS companies to expand their footprint. Traction metrics requirements: ARR of $500K+. At least 12 months of customer history, generally 20+ enterprise customers or 200+ SMB customers. Rational burn profile, up to 50% of revenue at close, scaling down. Capital need of up to $1.5M over next 12 months Thesis: We make fast, data-driven credit decisions for these types of businesses and show Founders how the math/ROI works. We’re currently evaluating about 20 companies a month and issuing term sheets to 25% of them; those that fit our investment criteria. We’re also regularly following-on for existing portfolio companies. 9. Colorado Impact Fund About: The Colorado Impact Fund (CIF) is a Denver-based venture capital firm investing in Colorado companies with high-growth, scalable business models and a commitment to make their community better. CIF was created to support a growing entrepreneurial and impact ecosystem throughout the state of Colorado. CIF manages approximately $80 million of private capital with the Colorado Impact Fund I and the Colorado Impact Bridge Fund. 10. UpSlope About: Formerly Galvanize Ventures, Upslope Ventures is an early stage venture capital fund that invests in startups across the country. We believe exceptional teams can originate from any location. We provide more than capital and introductions. By leveraging our network we aim to empower entrepreneurs with the resources they need to have their best chance at success - even if we don’t invest. Thesis: We invest in all catagories, some of which are: SaaS, Hardware/IOT, Mobile, AI, Consumer, E-Commerce, Content, FinTech, Aerospace, Marketplace, AdTech, Robotics, Medical Device, Virtual Reality, and Data Science. Key Industries Thriving in Denver A diverse range of thriving industries characterizes Denver's economy, each contributing significantly to the region's growth and innovation. Technology & SaaS Denver has established itself as a prominent hub for technology and SaaS companies. The city's favorable business environment and skilled workforce have attracted numerous tech startups and established firms. The IT-Software sector in Metro Denver is experiencing a surge, driven by a growing remote workforce and high quality of life. Clean Energy & Sustainability Colorado's abundant natural resources make it an ideal location for energy innovation and research. The state serves as a laboratory for advancements in renewable energy, strongly emphasizing sustainability. Metro Denver's energy and natural resources industry is robust, supporting a significant workforce and contributing to the region's economic vitality. Life Sciences & Biotech Denver's bioscience industry thrives on collaboration and entrepreneurial spirit, fostering innovation in healthcare and biotechnology. The region's commitment to health and wellness is evident, with Colorado consistently ranking as one of the healthiest states in the U.S. This focus has led to a dynamic healthcare and wellness industry in Metro Denver. Aerospace & Defense Colorado boasts the nation's second-largest aerospace economy, with a high concentration of major space contractors and suppliers. The state's strategic location and educated talent pool have made it a leader in aerospace employment. Colorado's aerospace ecosystem is the global leader, ranking #1 per capita in aerospace employment, with over 2,000 aerospace businesses directly employing over 55,000 individuals. Notable Denver Startups That Secured Funding Denver's startup ecosystem has witnessed remarkable success stories, with several companies securing substantial funding from prominent venture capital firms. Here are some notable examples: Guild Education A leading education platform that partners with employers to offer debt-free degrees to workers, Guild Education achieved unicorn status in 2019. The company has attracted investments from firms such as Bessemer Venture Partners, GV (formerly Google Ventures), and ICONIQ Capital. Ibotta A cashback rewards app that provides users with real cash back on everyday purchases, Ibotta has secured significant venture backing, including a $85 million Series D funding round in 2017 led by Koch Disruptive Technologies. Outrider An autonomous truck startup specializing in automating yard operations for logistics hubs, Outrider secured $62 million in Series D funding in October 2024. The round was led by Koch Disruptive Technologies and New Enterprise Associates, bringing its total funds raised to over $250 million. AMP Robotics A company that develops AI-powered robotics systems for recycling facilities, AMP Robotics raised $91 million in a Series C funding round in 2021, with investments from XN, Valor Equity Partners, and GV. Soona A Denver-based photo and video studio startup, Soona raised $10.2 million in a Series A funding round in 2021, led by Union Square Ventures, to enhance its real-time content creation services for e-commerce clients. Connect With Investors in Denver Using Visible At Visible, we often times compare a fundraise to a B2B sales and marketing funnel. At the top of your funnel, you are finding new investors. In the middle, you are nurturing and pitching potential investors. At the bottom of the funnel, you are working through diligence and ideally closing new investors. With the introduction of data rooms, you can now manage every aspect of your fundraising funnel with Visible. Find investors at the top of your funnel with our free investor database, Visible Connect and find a filtered list of Denver investors here. Track your conversations and move them through your funnel with our Fundraising CRM Share your pitch deck and monthly updates with potential investors Organize and share your most vital fundraising documents with data rooms Manage your fundraise from start to finish with Visible. Give it a free try for 14 days here.

Seattle has become a vibrant hub for startups, driven by a combination of technological innovation, top-tier talent, and a supportive investment landscape. The city is home to global tech giants such as Amazon and Microsoft, which have helped establish a strong foundation for technology-driven entrepreneurship. Beyond the major corporations, Seattle boasts a highly educated workforce, with talent frequently emerging from the University of Washington and other prestigious institutions. The city also benefits from a supportive infrastructure that includes startup accelerators like Techstars Seattle and coworking spaces such as The Cloud Room and The Pioneer Collective. Emerging innovation hubs in neighborhoods like South Lake Union and Pioneer Square have become focal points for the startup community, hosting a diverse mix of startups, venture capital firms, and creative workspaces. With these combined elements, Seattle continues to solidify its reputation as an ideal location for founders seeking to raise capital and build transformative companies. This guide will explore the key elements of Seattle's startup landscape, from active VCs and strategic fundraising insights to overcoming challenges and leveraging regional advantages for success. Top 10 Active VCs in Seattle Madrona Venture Group About: Madrona Venture Group has been investing in early-stage technology companies in the Pacific Northwest since 1995. Thesis: Early Stage through the long run Pioneer Square Labs About: A seed and pre-seed venture capital fund based in Seattle, Washington. Thesis: Investing in market-defining companies at Pre-Seed, Seed, and Series A Flying Fish Partners About: We are an early-stage venture firm based in Seattle investing in high-potential AI and ML technology companies across the U.S. and Canada. We believe artificial intelligence and machine learning will disrupt every industry and are looking for the next generation of leaders in every field who are building companies with machine learning at the heart of their strategy. Frazier Healthcare Partners About: Since 1991, Frazier Healthcare Partners leverages the experience of its team of investment professionals, Center of Excellence, Senior Advisors and Executives in Residence to identify broader industry trends, develop specific investment theses, and then partner with accomplished industry executives to identify, acquire, and optimize businesses across healthcare. Within its Growth Buyout strategy, Frazier has invested over $2.7 billion in 44 portfolio companies across 10 investment vehicles. Frazier’s core values are based in integrity, performance, perseverance, transparency, empowerment, and social impact, and all six values drive how Frazier operates as a firm. Keeler Investments About: We invest between $100,000 -250,000 into Founder, Pre-Seed and Seed rounds, with substantial reserve for follow on. We like to play a supportive and engaged role to help a company early in its life, with a particular focus on connecting our portfolio company's to leading later stage investors up and down the West Coast. Our primary focus is on software and services, both Enterprise and Consumer. That said, we have invested in non-software opportunities when the team and market present a compelling opportunity. We have recently begun investing in companies at the forefront of the "Environmental Economy" who are bringing new, sustainable and compelling solutions to the table. Voyager Capital About: Voyager Capital is a leading Pacific Northwest venture firm providing entrepreneurs with the resources, experience and connections to build successful technology companies. Voyager leads first venture round investments in software, analytics and cloud infrastructure startups, deploying the firm's domain expertise, go-to-market and team building resources help build market leaders. The firm has offices in Seattle, Washington and Portland, Oregon."​ Thesis: With a focus on investing in the modern economy through AI-driven business solutions, software-driven hardware, sustainable agriculture, and supply chain in the Pacific Northwest and Western Canada, we create a relationship with you early in your company’s lifecycle. We’re entrepreneur centric — so when we invest in your business, we invest in you. Our team is available, responsive and committed to you when and where you need it — from your very first venture round. The result is fast-tracked time to revenue with less capital. Tola Capital About: Tola Capital is a venture capital firm that invests globally in enterprise software companies across multiple stages. Thesis: We look for software companies with essential products for enterprise customers, a solid existing customer base, a strong competitive position, and great talent and culture. Tola Capital invests predominantly in early stage enterprise software companies. Ignition Partners About: Ignition Partners, a dedicated early-stage enterprise software venture capital firm, invests based on decades of operating experience and enterprise relationships. We have lived through the transitions from mainframe to mini to PC to cloud. We are the only firm operating with significant footprints in both Seattle and Silicon Valley, and our network has a global reach. Maveron About: Maveron funds seed and Series A companies that empower consumers to live on their terms. Based in SF and Seattle and invest coast-to-coast. Thesis: Maveron funds seed and Series A companies that empower consumers to live on their terms. Based in SF and Seattle and invest coast-to-coast. Founders’ Co-op About: Founders' Co-op is a seed-stage investment fund based in the Pacific Northwest. Thesis: We are proud supporters of the unique innovation ecosystem that thrives across the entire region and are on a mission to power and enable founders with that pioneer mentality. Seattle’s Fundraising Landscape Seattle’s fundraising landscape is dynamic and rich with opportunities, making it an attractive destination for early-stage startups seeking capital. The city's blend of established tech giants, a growing network of venture capital firms, and a culture of innovation create a supportive environment for entrepreneurs. Building Local Relationships Networking is a cornerstone of Seattle’s startup community. Founders can benefit from engaging in local events such as New Tech Seattle, TechCon 365, and more, which can be found on GeekWire. Accelerators like Techstars Seattle and the WTIA Founder Cohort Fund also provide structured opportunities to build relationships and gain valuable insights. Leverage Regional Expertise Many investors in Seattle focus on industries where the region excels, such as enterprise SaaS, e-commerce, AI, and clean energy. Startups aligning their pitches with these sectors can increase their chances of securing investment. Leveraging Seattle’s tech-driven identity can be a key differentiator for founders seeking funding. Understand Seattle's VC Landscape Seattle's VC ecosystem is heavily oriented towards early-stage investments, with firms like Madrona and Flying Fish Partners frequently backing local startups. However, many Seattle-based VCs also have strong connections to larger Silicon Valley firms, allowing startups to tap into broader networks for later-stage funding when scaling. Advantages for Fundraising and Running a Successful Startup in Seattle Talent Availability for Fundraising and Execution Seattle benefits from a deep pool of experienced founders and advisors, many of whom hail from leading companies like Amazon, Microsoft, and Zillow. These seasoned professionals often mentor and invest in local startups, offering valuable guidance and connections. The University of Washington also contributes significantly, providing a steady stream of tech-savvy talent and access to cutting-edge research, which is a key selling point for VCs. Strategic Focus Areas for Investors Seattle VCs often specialize in tech-heavy sectors such as SaaS, cloud computing, and machine learning, creating targeted funding opportunities for startups in these areas. Investors are also increasingly interested in sustainability, clean energy, and biotech, aligning with global market trends. Many funds emphasize mission-driven and socially responsible investments, reflecting the city’s progressive ethos. Cost-Effective Compared to Other Major Hubs While Seattle isn’t the cheapest city for startups, it remains more cost-effective than hubs like Silicon Valley. Lower operational costs allow founders to stretch funding further while maintaining high-quality operations. Seattle investors also tend to favor capital-efficient businesses with lean operations, aligning with the city’s pragmatic approach to entrepreneurship. Challenges Seattle Startups Might Face and How to Overcome Them Competition for Talent Seattle’s booming tech sector, anchored by giants like Amazon and Microsoft, creates intense competition for top talent. Startups can address this challenge by offering unique perks such as flexible work environments, equity opportunities, and a focus on mission-driven work that appeals to younger professionals. Engaging with university programs and internship pipelines, especially from the University of Washington, can also help startups attract emerging talent. Limited Late-Stage Funding While Seattle is strong in early-stage funding, later-stage capital can be harder to secure locally. Founders seeking growth-stage funding may need to build connections with Silicon Valley or East Coast investors. Attending national investor conferences, participating in cross-regional pitch events, and leveraging introductions from local early-stage investors can help bridge this gap. Navigating a Smaller Investment Pool While Seattle offers high-quality investors, the overall investment pool is smaller than larger hubs like New York or the Bay Area. To mitigate this, founders should focus on developing strong relationships with local investors and actively seek co-investment opportunities with out-of-state firms to diversify their funding sources. Connect With Investors in Seattle Using Visible At Visible, we often times compare a fundraise to a B2B sales and marketing funnel. At the top of your funnel, you are finding new investors. In the middle, you are nurturing and pitching potential investors. At the bottom of the funnel, you are working through diligence and ideally closing new investors. With the introduction of data rooms, you can now manage every aspect of your fundraising funnel with Visible. Find investors at the top of your funnel with our free investor database, Visible Connect and find a filtered list of Seattle investors here. Track your conversations and move them through your funnel with our Fundraising CRM Share your pitch deck and monthly updates with potential investors Organize and share your most vital fundraising documents with data rooms Manage your fundraise from start to finish with Visible. Give it a free try for 14 days here.

California is home to one of the most dynamic startup ecosystems in the world, attracting a diverse range of venture capital firms that support innovation across industries such as technology, healthcare, climate tech, and entertainment. From the global tech hub of Silicon Valley to the creative energy of Los Angeles and the biotech strength of San Diego, the state's VC landscape offers founders unparalleled access to capital, mentorship, and resources. In this article, we’ll highlight some of California's top venture capital firms. Top Venture Capitalists in California Silicon Valley 1. Khosla Ventures About: At KV, we fundamentally like large problems that are amenable to technology solutions. We seek out unfair advantages: proprietary and protected technological advances, business model innovations, unique approaches to markets, different partnerships, and teams who are passionate about a vision. Notable Investments: Square, DoorDash, Impossible Foods. 2. Redpoint Ventures About: Redpoint Ventures partners with visionary founders to create new markets or redefine existing ones at the seed, early and growth stages. Notable Investments: Netflix, Stripe, Snowflake. 3. Sapphire Ventures About: Sapphire Ventures is a venture capital firm that focuses on helping technology companies. Entrepreneurs build successful and lasting internet companies. We invest in all stages, all sectors in Asia, US and Israel. Notable Investments: LinkedIn, Box, Square. 4. Social Capital About: Social Capital’s mission is to build the future. We do this by identifying emerging technology trends, partnering with entrepreneurs that are trying to solve some of the world's hardest problems and help them build substantial commercial and economic outcomes. Our returns have placed us among the top technology investors in the world and act as a signal that we have generally been on the right track. Notable Investments: Slack, Box, Yammer. 5. Lightspeed Venture Partners About: Lightspeed Venture Partners is a multi-stage venture capital firm focused on accelerating disruptive innovations and trends in the Enterprise, Consumer, Health, and Fintech sectors. Notable Investments: Snapchat, Nest, Grubhub. 6. Benchmark Capital About: Benchmark Capital is focused on one, and only one, mission: to help talented entrepreneurs build great technology companies. That's what drives them and everything they do - from how they organize their firm to their investment strategy. Their investments range in size from as little as $100,000 to as much as $10 or $15 million. Typically, they invest $3 to $5 million initially and expect to invest $5 to $15 million over the life of a company. Notable Investments: eBay, Twitter, Uber, Instagram. 7. Greylock Partners About: This venture capital firm invests in all stages, exclusively in consumer and enterprise software companies. It led the Series B round for both Facebook and Linkedin. Notable Investments: LinkedIn, Airbnb, Dropbox. 8. Accel About: Accel is a leading venture capital firm that invests in people and their companies from the earliest days through all phases of private company growth. Atlassian, Braintree, Cloudera, CrowdStrike, DJI, Dropbox, Dropcam, Etsy, Facebook, Flipkart, FreshWorks, Jet, Qualtrics, Slack, Spotify, Supercell, UiPath and Vox Media are among the companies the firm has backed over the past 35 years. Notable Investments: Facebook, Slack, Spotify. 9. GV (formerly Google Ventures) About: The VC arm of Alphabet (Google’s parent) investing in the fields of life science, healthcare, artificial intelligence, robotics, transportation, cyber security, and agriculture. It was the most active CVC in 2017. Notable Investments: Uber, Nest, Medium. 10. Menlo Ventures About: We are investors and company builders—we know what it takes to turn a budding idea into a scalable business. We work with early-stage founders to find product-market fit, develop go-to-market strategies, scale their organizations, and support them as they grow. Notable Investments: Uber, Roku, Siri. 11. Bessemer Venture Partners About: Bessemer Venture Partners is the world's most experienced early-stage venture capital firm. With a portfolio of more than 200 companies, Bessemer helps visionary entrepreneurs lay strong foundations to create companies that matter, and supports them through every stage of their growth. Notable Investments: LinkedIn, Shopify, Yelp. Los Angeles 12. Upfront Ventures About: We invest primary in the US but have a 20-year history of funding companies in Europe. Our managing partners (Yves Sisteron & Mark Suster) are both dual citizens of France & UK respectively. Kevin Zhang funds games companies and looks in Sweden, Finland, UK and beyond. And locally Julien Etaix is based in Paris and open to talking with anybody on the continent. Notable Investments: Ring, TrueCar, Maker Studios. 13. Act One Ventures About: Seed stage fund focused on enterprise software and research from LA Universities. We believe in community, diversity, and Los Angeles. Notable Investments: AuditBoard, Finix, Tapcart, Ordermark, Repeat. 14. LDR Ventures About: LDR is a VC firm based in Los Angeles investing In Female & Minority Founders, Consumer Product, Food, E-Comm, Marketplaces & Legal Tech Thesis: Female led and Los Angeles based, we consult to and invest primarily in female entrepreneurs at the Seed & Series A Stages. Notable Investments: Sweetgreen, Thrive Market, Court Buddy, junzi, LawChamps. 15. TenOneTen Ventures About: TenOneTen Ventures, a Los Angeles-based venture firm, invests in start-ups that apply data and technology to disrupt existing industries. Thesis: TenOneTen Ventures is a Los Angeles-based venture firm that invests in underlying technologies that transform major industries. Notable Investments: Mashgin, Tailscale, Alation, Procore, Scopely 16. Mucker Capital About: MuckerLab is a venture capital firm specializing in incubation, pre-seed, seed, start up, early stage and Series A investments. Thesis: We partner with exceptional entrepreneurs to provide their earliest institutional funding and work with them side-by-side to help launch and scale their new ventures. Notable Investments: Honey, ServiceTitan, Surf Air. San Diego 17. Tech Coast Angels About: Tech Coast Angels is the largest angel investor group in the United States, possessing more than 300 members in five networks in Los Angeles, Orange County, San Diego, Central Coast, and the Inland Empire. Its members provide funding and guidance to more early-stage, high-growth companies in Southern California than any other investment group. Notable Investments: Procore Technologies, Mindbody, Green Dot Corporation, Sandpiper Networks, TrueCar 18. Spark Growth Ventures About: Spark Growth Ventures is a community driven, early & mid stage, vertical-agnostic, technology venture capital firm. Our mission is to support gritty and exceptional founders in their missions by bringing forth the combined value of our strong community. We are fortunate to have a global network of entrepreneurs, C-level relationships, subject matter experts, world-class talent, institutional investors, high net worth individuals and family offices, many of who are investors in our platform. Our team has several decades of global experience in venture capital, entrepreneurship, innovation, executive & board management, functional leadership and advisory work. 19. Ganas Ventures About: Ganas Ventures invests in pre-seed and seed Web 2 and Web 3 community-driven startups in the US and Latin America. Thesis: Ganas Ventures invests in pre-seed and seed Web 2 and Web 3 community-driven startups in the US and Latin America. It's run by solo-GP Lolita Taub. ​​ 20. Lolita Taub About: Lolita Taub is the Chief of Staff and interim Head of Sales at Catalyte, and a 2x TEDx speaker, with a venture capital and enterprise tech background. She is also Scout at Indie.VC, an investor at NextGen Venture Partners, an LP at Operator Collective and Portfolia’s Enterprise Fund; and a former VC at Backstage Capital and K Fund. Lolita holds over a decade of enterprise B2B software, hardware, and services sales experience at IBM, Cisco Systems and in Silicon Valley. 21. Qualcomm Ventures About: Interested in anything wireless, but especially virtual reality, the internet of things, robotics, cloud, and wireless health. Sacramento 22. Impact Venture Capital About: Impact Venture Capital invests in early stage IT startups, with a focus on TMT, Civic Tech, Cyber Security, FinTech, and Data Analytics. Thesis: Early Stage with a focus on AI & AI applied 23. Black Angel Tech Fund About: Black Angel Tech Fund provides startup and early stage capital to companies. Thesis: Investing in next generation innovators. The Current Fundraising Climate in California California remains dominant in the startup ecosystem, attracting substantial venture capital (VC) investments across various sectors. The state's dynamic economy and culture of innovation continue to make it a prime destination for entrepreneurs seeking funding. Fundraising Trends in California In the second quarter of 2024, deal count and total capital raised increased significantly compared to the first quarter. 1,287 funding rounds culminated in $20.9 billion in investments, marking the highest amount of VC cash invested in any quarter over the past year. This uptick suggests a rebound in market activity, indicating that the first quarter may have represented the low point, with expectations for stabilization or further growth in subsequent quarters. Sectors Attracting the Most Investment Several industries in California are currently experiencing significant investor interest: Artificial Intelligence (AI): AI stands at the forefront, with startups in this sector receiving over $24 billion in funding to date. Advancements in generative AI, natural language processing, and machine learning applications are primary drivers of this investment surge. Healthcare and Health Tech: Startups in healthcare secured over $11 billion in the first quarter of 2024, focusing on telemedicine, digital health, and biotechnology. This sector's growth reflects a broader trend towards integrating technology with healthcare services. Biotechnology: Biotech companies continue to attract substantial investments, particularly those involved in research and development of innovative medical treatments and technologies. For instance, Arsenal Bio, a biotech firm, was among the top-funded startups in the third quarter of 2024. Climate Tech: Despite facing fundraising challenges due to high interest rates and delays in federal support, certain climate tech companies have managed to secure funding. However, the sector has seen some companies, like Moxion Power and SunPower, file for bankruptcy, highlighting the volatility and risks associated with this industry. Key Challenges and Opportunities in California's Fundraising Landscape Navigating the fundraising terrain in California presents a unique set of challenges and opportunities for startup founders. Understanding these dynamics is crucial for effectively securing capital and positioning your venture for success. Challenges Cost of Doing Business Expensive Ecosystem: Operating in California entails higher costs, including elevated expenses for rent, salaries, and general overhead. These financial demands can pressure startups to seek larger funding rounds to sustain operations. Intense Competition Among Startups High Volume of Startups: California's vibrant startup scene, particularly in hubs like Silicon Valley and Los Angeles, means founders must differentiate their ventures amidst a crowded and innovative market. High Bar for Entry: Venture capitalists in the state often have access to numerous promising startups, leading to stringent expectations regarding traction, team credentials, and product uniqueness. Focus on Metrics and Proof Points Data-Driven Decisions: Investors prioritize clear evidence of market traction, robust unit economics, and significant growth potential before committing funds. Expectations: Some investors may anticipate rapid growth trajectories or expansive market sizes, posing challenges for early-stage startups still refining their business models. Opportunities Access to World-Class Talent Diverse Workforce: California's status as a global tech hub attracts top-tier talent across various disciplines, including engineering, marketing, and design, providing startups with a rich pool of skilled professionals. Network Effects: The state's dense ecosystem of advisors, mentors, and specialized professionals fosters collaboration and accelerates growth for emerging companies. Proximity to Leading Tech Hubs Silicon Valley: As a global epicenter for innovation, Silicon Valley houses some of the world's most influential venture capitalists and tech companies, offering unparalleled access to resources and funding opportunities. Los Angeles: With a rapidly expanding startup ecosystem, Los Angeles excels in media, entertainment, and consumer technology sectors, providing niche opportunities for startups in these industries. San Diego: Renowned for its biotech and health tech innovations, San Diego offers specialized opportunities for startups in these sectors, supported by a strong network of research institutions and industry experts. Vibrant Startup Ecosystem Innovation Clusters: California boasts numerous accelerators, incubators, and co-working spaces that encourage collaboration and the exchange of ideas, fostering a supportive environment for startups. Networking Opportunities: Regular events such as pitch competitions, conferences, and meetups provide founders with direct access to investors and industry leaders, facilitating valuable connections. Diverse Investor Landscape Broad Spectrum of Investors: The state hosts a wide range of investors, from angel investors to large venture capital firms, enabling startups to find suitable funding partners at various growth stages. Focus on Disruption: California investors often seek bold, transformative ideas, making the region an ideal environment for startups with visionary goals aiming to challenge the status quo. Major Venture Capital Hubs in California California's expansive landscape hosts several prominent venture capital (VC) hubs with distinct characteristics and investment focuses. Understanding these regional nuances can help founders tailor their fundraising strategies effectively. Silicon Valley About: Silicon Valley is synonymous with technological innovation and entrepreneurship. It remains the epicenter of venture capital activity in the US, attracting significant VC investments. Investor Focus: Silicon Valley investors predominantly target technology-driven sectors, including software, hardware, artificial intelligence, and biotechnology. Firms such as Sequoia Capital and Andreessen Horowitz/ a16 are notable players in this region. Los Angeles About: Los Angeles has emerged as a thriving startup ecosystem, excelling in media, entertainment, and consumer technology. The city's diverse cultural landscape and proximity to the entertainment industry provide unique opportunities for startups in these sectors. Investor Focus: VCs in Los Angeles often concentrate on startups at the intersection of technology and entertainment, including digital media, gaming, and content creation platforms. The region also sees investments in e-commerce and health tech. San Diego About: San Diego is renowned for its strong biotechnology and life sciences sectors, supported by a robust network of research institutions and universities. This foundation has cultivated a specialized startup ecosystem focused on health tech and biotech innovations. Investor Focus: Investors in San Diego primarily seek opportunities in biotechnology, pharmaceuticals, and medical devices, leveraging the region's research capabilities and talent pool. Recent investments have been directed towards companies developing novel therapeutics and healthcare solutions. Sacramento About: As the state capital, Sacramento's startup scene is growing, focusing on sustainability, agriculture technology (AgTech), and government technology (GovTech). The city's proximity to state government agencies offers unique opportunities for startups in regulatory tech and public sector solutions. Investor Focus: VCs in Sacramento often focus on AgTech, clean energy, and GovTech startups, aligning with the region's economic strengths and policy landscape. Investments are geared towards companies addressing environmental challenges and enhancing governmental operations. Regional Differences in Investor Approach Deal Size and Stage: Silicon Valley typically sees larger deal sizes and a higher concentration of late-stage investments, reflecting the maturity of its startup ecosystem. In contrast, regions like Sacramento may have more early-stage funding opportunities, catering to nascent startups. Sector Specialization: While Silicon Valley maintains a broad tech focus, regions like San Diego exhibit deep specialization in biotech and Los Angeles in media and entertainment tech. Founders should align their sector focus with each region's strengths to attract suitable investors. Investment Philosophy: Investor expectations can vary by region. Silicon Valley investors may prioritize rapid scalability and disruptive potential, whereas investors in other regions might focus on sustainable growth and sector-specific innovations. Connect With Investors in California Using Visible At Visible, we often times compare a fundraise to a B2B sales and marketing funnel. At the top of your funnel, you are finding new investors. In the middle, you are nurturing and pitching potential investors. At the bottom of the funnel, you are working through diligence and ideally closing new investors. With the introduction of data rooms, you can now manage every aspect of your fundraising funnel with Visible. Find investors at the top of your funnel with our free investor database, Visible Connect and find a filtered list of California investors here. Track your conversations and move them through your funnel with our Fundraising CRM Share your pitch deck and monthly updates with potential investors Organize and share your most vital fundraising documents with data rooms Manage your fundraise from start to finish with Visible. Give it a free try for 14 days here.

The United States has long been a global hub for innovation, driven by a thriving ecosystem of venture capital (VC) firms that empower startups to scale and succeed. From Silicon Valley to New York City, the nation's VCs provide more than just capital- they offer mentorship, strategic support, and vast networks that help founders navigate the complex journey of building world-class companies. This article spotlights some of the most active and influential venture capital firms in the US, each bringing unique philosophies and investment approaches to the table. Whether you're a founder seeking early-stage backing or a growth-stage startup looking for significant capital, understanding the strengths and focus areas of these firms can help you identify the right partners to fuel your entrepreneurial ambitions. Top Active VCs in the United States General Catalyst About: General Catalyst backs exceptional entrepreneurs who are building innovative technology companies and market leading businesses, including Airbnb, BigCommerce, ClassPass, Datalogix, Datto, Demandware, Gusto (fka ZenPayroll), The Honest Company, HubSpot, KAYAK, Oscar, Snap, Stripe, and Warby Parker. The General Catalyst team leverages its broad experience to help founders build extraordinary companies. General Catalyst has offices in Cambridge, MA, Palo Alto, CA and New York City. Sweetspot check size: $ 30M Thesis: General Catalyst is a venture capital firm that makes early-stage and growth equity investments. Andreessen Horowitz/ a16z About: Andreessen Horowitz was established in June 2009 by entrepreneurs and engineers Marc Andreessen and Ben Horowitz, based on their vision for a new, modern VC firm designed to support today's entrepreneurs. Andreessen and Horowitz have a track record of investing in, building and scaling highly successful businesses. Sweetspot check size: $ 25M Thesis: Historically, new models of computing have tended to emerge every 10–15 years: mainframes in the 60s, PCs in the late 70s, the internet in the early 90s, and smartphones in the late 2000s. Each computing model enabled new classes of applications that built on the unique strengths of the platform. For example, smartphones were the first truly personal computers with built-in sensors like GPS and high-resolution cameras. Applications like Instagram, Snapchat, and Uber/Lyft took advantage of these unique capabilities and are now used by billions of people. Tiger Global Management About: Tiger Global is an investment firm focused on public and private companies in the global Internet, software, consumer, and financial technology industries. Sweetspot check size: $ 50M Thesis: Our mission is to generate world-class investment returns over the long term. We aspire to do so in a way that makes our partners and portfolio companies proud, as we build a unique, global investment platform. SOSV About: SOSV is a venture capital firm providing multi-stage investment to develop and scale their founders' big ideas for positive change. Sequoia Capital About: Sequoia is a VC firm focused on energy, financial, enterprise, healthcare, internet, and mobile startups. Sweetspot check size: $ 15M Thesis: We partner early. We’re comfortable with the rough imperfection of a new venture. We help founders from day zero, when the DNA of their businesses first takes shape. Lightspeed Venture Partners About: Lightspeed Venture Partners is a multi-stage venture capital firm focused on accelerating disruptive innovations and trends in the Enterprise, Consumer, Health, and Fintech sectors. Sweetspot check size: $ 30M Thesis: The future isn’t built by dreamers. It’s built today, by doers. Index Ventures About: They are an international venture capital firm based in London, San Francisco and Geneva Sweetspot check size: $ 30M Thesis: Other firms invest in deals, Index invests in people. A deal is transactional. Relationships endure, and ours are based on curiosity, thoughtfulness, and deep conviction. Greylock Partners About: This venture capital firm invests in all stages, exclusively in consumer and enterprise software companies. It led the Series B round for both Facebook and Linkedin Sweetspot check size: $ 30M Bessemer Venture Partners About: Bessemer Venture Partners is the world's most experienced early-stage venture capital firm. With a portfolio of more than 200 companies, Bessemer helps visionary entrepreneurs lay strong foundations to create companies that matter, and supports them through every stage of their growth. The firm has backed more than 120 IPOs, including Shopify, Yelp, LinkedIn, Skype, LifeLock, Twilio, SendGrid, DocuSign, Fiverr, Wix, and MindBody. Bessemer's 16 investing partners operate from offices in Silicon Valley, San Francisco, New York City, Boston, Israel, and India. Follow @BessemerVP and learn more at bvp.com. Sweetspot check size: $ 15M Kleiner Perkins About: Kleiner Perkins is a venture capital firm specializing in investing in early-stage, incubation, and growth companies. Sweetspot check size: $ 10M Thesis: To be the first call for founders who want to make history and to partner with them as company builders in pursuit of that goal. Accel About: Accel is a leading venture capital firm that invests in people and their companies from the earliest days through all phases of private company growth. Atlassian, Braintree, Cloudera, CrowdStrike, DJI, Dropbox, Dropcam, Etsy, Facebook, Flipkart, FreshWorks, Jet, Qualtrics, Slack, Spotify, Supercell, UiPath and Vox Media are among the companies the firm has backed over the past 35 years. Sweetspot check size: $ 10M Thesis: We partner with exceptional founders with unique insights, from inception through all phases of growth. Union Square Ventures About: Union Square Ventures is a venture capital firm focused on early-stage, growth-capital, late stage, and startup financing. Thesis: USV backs trusted brands that broaden access to knowledge, capital, and well-being by leveraging networks, platforms, and protocols. Insight Partners About: Insight Partners is a global software investor partnering with high-growth technology, software, and Internet startup and ScaleUp companies that are driving transformative change in their industries. As of June 30, 2023, the firm has over $80B in regulatory assets under management. Insight Partners has invested in more than 800 companies worldwide and has seen over 55 portfolio companies achieve an IPO. Sweetspot check size: $ 50M Thesis: We support companies in good times, as well as challenging ones. Benchmark About: Benchmark Capital is focused on one, and only one, mission: to help talented entrepreneurs build great technology companies. That's what drives them and everything they do - from how they organize their firm to their investment strategy. Their investments range in size from as little as $100,000 to as much as $10 or $15 million. Typically, they invest $3 to $5 million initially and expect to invest $5 to $15 million over the life of a company. Sweetspot check size: $ 10M New Enterprise Associates About: New Enterprise Associates is a global venture capital firm investing in technology and healthcare. Sweetspot check size: $ 25M Options and Considerations for Founders Fundraising in the US The United States offers a diverse range of fundraising options for startups, each suited to different stages of growth, industries, and founder objectives. Understanding these options and the unique aspects of the US fundraising ecosystem can empower founders to make informed decisions and maximize their chances of success. Fundraising Options Venture Capital (VC) Overview: VC firms provide capital in exchange for equity, typically focusing on high-growth startups with the potential for significant returns. When to Consider: Ideal for startups with scalable business models and a proven product-market fit. Key Differences in the US: US VCs are known for their willingness to take risks on early-stage companies compared to many international investors. They also offer extensive support networks, including mentorship and resources. Related resource: Deal Flow: Understanding the Process in Venture Capital Angel Investors Overview: Individual investors who provide early-stage funding, often in exchange for convertible debt or equity. When to Consider: Best for startups in the pre-seed or seed stage looking for smaller funding rounds and strategic guidance. Key Differences in the US: US angel networks are highly organized, offering founders access to syndicates and platforms like AngelList, which streamline fundraising. Related resource: How to Effectively Find + Secure Angel Investors for Your Startup Crowdfunding Overview: Platforms like Kickstarter, Indiegogo, and Wefunder allow startups to raise funds from a broad audience. When to Consider: Suitable for consumer-facing products or startups seeking to validate demand while raising capital. Key Differences in the US: The US has a mature crowdfunding ecosystem, supported by regulations like the JOBS Act, which allows equity crowdfunding. Related resource: Understanding The 4 Types of Crowdfunding Grants and Government Funding Overview: Non-dilutive funding options provided by federal, state, or local governments for specific industries or initiatives. When to Consider: A great choice for startups in sectors like clean energy, healthcare, or technology innovation. Key Differences in the US: Programs like SBIR (Small Business Innovation Research) and STTR (Small Business Technology Transfer) are unique to the US, offering significant financial support without equity dilution. Revenue-Based Financing Overview: Startups receive capital in exchange for a percentage of future revenue until the investment is repaid. When to Consider: Ideal for startups with predictable revenue streams that want to avoid equity dilution. Key Differences in the US: Revenue-based financing is growing in popularity, with firms like Clearco and Pipe leading the way. Family Offices Overview: High-net-worth individuals or families investing directly in startups, often with flexible terms. When to Consider: Best for startups seeking large checks with fewer constraints than traditional VC funding. Key Differences in the US: Family offices in the US are highly active and often open to exploring niche industries or unconventional deals. Corporate Venture Capital (CVC) Overview: Investments from large corporations aiming to gain strategic benefits or insights into emerging markets. When to Consider: Suitable for startups aligned with the strategic interests of the investing corporation. Key Differences in the US: US CVCs, such as Pruven or JLL Spark, are some of the most active globally, often offering deep industry expertise and market access. Related resource: Corporate Venture Capital vs Traditional VCs: Key Differences and Benefits Key Considerations for US Fundraising Market Focus US investors tend to favor startups addressing large domestic or global markets. Founders should be prepared to demonstrate how their solution scales across diverse customer segments. Due Diligence Standards US fundraising often involves rigorous due diligence. Founders should ensure their financials, legal structures, and growth metrics are well-documented and readily available. Networking and Warm Introductions Personal connections carry significant weight in the US fundraising ecosystem. Leveraging networks, attending industry events, and securing warm introductions can substantially increase success rates. Cultural Fit US investors often prioritize founder-investor alignment on vision, values, and long-term goals. Open communication and transparency are crucial for building trust. Connect with Investors in the US With Visible At Visible, we often times compare a fundraise to a B2B sales and marketing funnel. At the top of your funnel, you are finding new investors. In the middle, you are nurturing and pitching potential investors. At the bottom of the funnel, you are working through diligence and ideally closing new investors. With the introduction of data rooms, you can now manage every aspect of your fundraising funnel with Visible. Find investors at the top of your funnel with our free investor database, Visible Connect and find a filtered list of US investors here. Track your conversations and move them through your funnel with our Fundraising CRM Share your pitch deck and monthly updates with potential investors Organize and share your most vital fundraising documents with data rooms Manage your fundraise from start to finish with Visible. Give it a free try for 14 days here.

New York has cemented its position as one of the world's leading hubs for venture capital (VC). While Silicon Valley and Boston are often top-of-mind for startups, New York offers a distinct and thriving ecosystem for founders seeking investment. Its diversity, both in terms of industries and the range of available investors, makes it an ideal place for startups at any stage- whether you're pre-seed or scaling to Series D. Key Sectors for VC Investment in New York Investors in New York typically focus on industries that leverage the city's global influence, deep talent pools, and unique market dynamics. Prominent sectors include: FinTech: As the financial capital of the world, New York is home to numerous FinTech startups and investors looking to disrupt traditional banking, payments, and insurance systems. HealthTech: The region's robust healthcare networks and top-tier research institutions foster innovations in digital health, biotechnology, and patient management. Media and Entertainment: With a strong presence of media conglomerates, New York attracts startups in content creation, streaming platforms, and ad tech. Enterprise SaaS: Serving businesses worldwide, many VC-backed startups in New York develop software solutions for workflow optimization, data analytics, and cybersecurity. E-Commerce and Consumer Tech: With a consumer-driven market, startups in fashion, lifestyle, and food tech find fertile ground here. Advantages of Fundraising in New York Fundraising in New York offers several advantages: Proximity to Corporations and Markets: With Fortune 500 companies, major financial institutions, and a high concentration of global headquarters, startups can easily find strategic partnerships and early customers. Diverse Investment Landscape: New York's VC ecosystem includes a mix of generalist and specialist firms, angel investors, family offices, and accelerators. Founders can find support regardless of their industry or growth stage. Access to Talent: The city's reputation as a melting pot ensures access to a skilled workforce spanning technical, creative, and operational disciplines. A Dynamic Ecosystem: Events, pitch competitions, and startup accelerators provide platforms for networking, mentorship, and exposure to investors. Startup Landscape in the Greater New York Area While New York City often takes center stage in conversations about startups and venture capital, the greater New York area is seeing a surge in activity as emerging tech hubs make their mark. Areas like Long Island, Westchester County, the Hudson Valley, and even parts of New Jersey and Connecticut are becoming increasingly attractive for startups and investors. These regions offer unique advantages that complement the city's fast-paced environment, making the greater New York area a diverse and dynamic ecosystem for innovation. Emerging Tech Hubs to Watch Long Island Known for its proximity to top research institutions like Stony Brook University, Long Island nurtures startups in biotech, renewable energy, and advanced manufacturing. The area also boasts lower operational costs than Manhattan, appealing to early-stage companies. Westchester County With a strong emphasis on HealthTech and MedTech, Westchester benefits from its proximity to healthcare giants and research hospitals. Startups in this region often leverage access to specialized talent and partnerships with major industry players. Hudson Valley Recognized for its growing focus on sustainable agriculture, clean energy, and artisanal food production, the Hudson Valley is attracting mission-driven startups. The region's picturesque setting and collaborative communities draw founders seeking a balance between innovation and lifestyle. Northern New Jersey Cities like Hoboken, Jersey City, and Newark are experiencing a tech boom fueled by their proximity to NYC, affordable office space, and access to talent from nearby universities like Rutgers and NJIT. FinTech, logistics tech, and consumer startups are thriving here. Connecticut’s Gold Coast Towns like Stamford and Greenwich are becoming hubs for FinTech and enterprise software companies. With a high concentration of financial firms and venture funds, startups benefit from capital access and networking opportunities. What Attracts Startups and Investors to These Areas? Cost Efficiency: Compared to Manhattan, the greater New York area offers more affordable office space and living costs. This particularly appeals to bootstrapped startups and early-stage companies aiming to extend their runway. Talent Pools: The presence of top universities and research centers in these regions ensures a steady pipeline of skilled graduates and experienced professionals. Infrastructure and Connectivity: Proximity to New York City provides startups with easy access to the city’s resources, clients, and investors while allowing them to operate in a less competitive, more collaborative environment. The NYC Impact on Regional Startups Proximity to New York City remains critical for startups in the greater New York area. NYC serves as an anchor, offering: Access to Capital: Many venture capital firms headquartered in Manhattan actively scout for investment opportunities in surrounding areas. Networking Opportunities: Regular events, conferences, and accelerators centered in NYC provide startups with a platform to connect with peers, mentors, and investors. Customer Base: The city’s dense population and status as a global business hub offer startups a vast and diverse market to test and scale their products. The Top Ten VCs in the Greater New York Area Armory Square Ventures About: We are a seed and early stage venture capital firm based in Upstate NY and NYC. We focus on opportunities where we can combine our capital with our networks to help talented entrepreneurs build world-class businesses. Traction metrics requirements: No min. revenue requirement, Addressable markets of at least $500M, Full-time technical/product leader and sales/marketing leader, Prototype of product deployed with a small sample size of customers (even if piloting); capital efficient Thesis: We are entrepreneurs ourselves and seek those as passionate as we are about changing the world through new business. Tech Council Ventures About: Tech Council Ventures is a venture fund investing in early and expansion stage companies across all industries in the US Mid-Atlantic region. The fund invests $500K to $3M initially and provides additional support throughout the growth of the business. Tech Council Ventures’ principals all have 20+ years investing and building promising, rapid growth companies. The fund is affiliated with one of the largest and most active technology councils in the US, TechUnited:NJ, providing for its portfolio investments an unmatched network of customer, key team recruits, business partner and service provider connections. Canaan Partners About: Canaan Partners invests more than money in a company—they invest their time, experience, knowledge, connections and team-oriented approach. They place tremendous value on creating working partnerships with entrepreneurs and management teams who have the character and the drive to succeed. Prominent among Canaan's resources is the breadth of operating, managerial and financial experience. Harmony Partners About: Harmony Partners is a highly differentiated venture capital firm that makes expansion stage investments in high growth software, internet and tech-enabled companies. By eliminating the typical deal constraints of traditional growth equity firms around minimum check sizes and ownership percentages, Harmony fills a gap in the market. Founded in New York City in 2010 and investing globally, our team has deployed more than $1 billion in over 100 technology companies over the past 25 years. Primary About: Primary Venture Partners (previously High Peaks) is a seed stage VC firm based in NY, focused on ecommerce and enterprise SaaS. Sweetspot check size: $ 3M Thesis: Unparalleled experience, resources and networks to help New York’s most promising founders build market-defining companies. New York Venture Partners About: New York Venture Partners is a seed stage venture capital firm dedicated to the entrepreneur. Sweetspot check size: $ 25K Thesis: We are all about the entrepreneur's success. The Helm About: The Helm is a New York City-based early-stage venture firm investing in game-changing companies founded by women. By investing in female-founded and underfunded technology-enabled companies, greater social and financial returns can be realized. Thesis: We believe that innovation is not gender-specific, so we do not accept that 97.5 percent of the most valuable capital supporting innovation should go to male founders only. It is imperative that female voices have a role in creating the companies, technologies, and systems that will shape our future. Runway Venture Partners About: Runway Venture Partners is a New York City-based early stage venture capital firm focused on investing in post product-market fit SaaS and software-enabled businesses. Sweetspot check size: $ 750K Traction metrics requirements: $50k MRR Thesis: B2B SaaS Lytical Ventures About: Lytical Ventures is a New York City-based venture firm investing in Corporate Intelligence, comprising cybersecurity, data analytics, and artificial intelligence. Lytical’s professionals have decades of experience in direct investing generally and in Corporate Intelligence specifically. Company Ventures About: Company Ventures is a NYC-based, seed-stage venture firm. We believe deeply in the power of being in good company while building the future. For the better part of a decade, via our various programs and investing activity, we have formed a community of exceptional founders building great companies the right way, providing each the ideal environment in which to build with no strings attached. We invest across industries, but have a focus on digital health, fintech, and enterprise software. If you're interested in working with us, please drop us a line or connect with us on social media. Sweetspot check size: $ 750K Connect with Investors in New York With Visible At Visible, we often times compare a fundraise to a B2B sales and marketing funnel. At the top of your funnel, you are finding new investors. In the middle, you are nurturing and pitching potential investors. At the bottom of the funnel, you are working through diligence and ideally closing new investors. With the introduction of data rooms, you can now manage every aspect of your fundraising funnel with Visible. Find investors at the top of your funnel with our free investor database, Visible Connect Track your conversations and move them through your funnel with our Fundraising CRM Share your pitch deck and monthly updates with potential investors Organize and share your most vital fundraising documents with data rooms Manage your fundraise from start to finish with Visible. Give it a free try for 14 days here. Related resource: Exploring the Top 10 Venture Capital Firms in New York City in 2024 Related resource: 12 New York City Angel Investors to Maximize Your Funding Potential

Latin America's tech hubs are leading a wave of transformation, driven by innovation and a surge in global investment. From the fintech powerhouse of São Paulo to Santiago’s strides in clean energy, these cities are shaping the future of technology in the region. For founders seeking to tap into these growing ecosystems, opportunities for funding, talent, and growth are abundant. Discover how these hubs are positioning Latin America as a force in global innovation. Discover VCs investing in LATAM on our Connect investor database. Related resource: 7 Best Venture Capital Firms in Latin America in 2024 1. São Paulo, Brazil São Paulo is the largest and most dynamic tech hub in Brazil, serving as the heart of Latin America's innovation ecosystem. With a massive market, supportive infrastructure, and increasing international investment, São Paulo offers a fertile ground for startups and established tech companies alike. Key Sectors: Fintech: São Paulo is a fintech powerhouse, hosting numerous startups that are revolutionizing digital banking, payments, and financial services. E-commerce: The city's vast consumer base drives the growth of online retail platforms and logistics innovation. Healthtech: Innovations in telemedicine, healthcare access, and medical technology are thriving. Agritech: Advanced agricultural technology solutions help optimize Brazil's significant agricultural output. Notable Startups and Companies: Nubank: One of the world's largest digital banks, Nubank has reshaped financial services with its user-friendly banking solutions. MercadoLibre: The e-commerce giant dominates online retail in Latin America and continues to expand its fintech services. Gympass: A global platform offering corporate wellness solutions, Gympass connects employees to fitness options worldwide. Creditas: A leading digital lending platform providing secured loans and financial solutions to consumers. Top VCs in São Paulo, Brazil: Check out the full list of VCs located in São Paulo, Brazil. 1. Canary Ventures About: Canary provides the first venture capital round, seed or Series A, to tech companies that operate in Brazil. We are an entrepreneur-friendly and well-connected partner that will be by your side, helping in impactful matters, as your startup takes off. 2. Valor Capital Group About: Valor Capital Group is the pioneer cross-border Venture Fund operating at the intersection between innovation & regulation and technology & innovation and bridging the US, Latin American and Global technology markets. 3. Monashees About: The firm serves entrepreneurs starting with their very first movements, supporting their growth through its expansion funds. With a human-values-first approach, monashees helps founders challenge the status quo and improve people’s lives through technology. 4. Redpoint eVentures About: Redpoint eventures, the first Silicon Valley fund on the ground in Brazil, focuses on early-stage internet investments. 5. Bossanova Investimentos About: Bossanova is the most active VC in Latin America ; We invest in startups at the pre-seed stage; B2B or B2B2C companies with scalable and digital business models that are operating and making money. 2. Mexico City, Mexico Mexico City has solidified its status as a leading tech hub in Latin America, often referred to as the "Silicon Valley of Latin America.". Mexico City stands out as a vibrant tech hub strategically positioned for growth in Latin America. Its large population, expanding middle class, and proximity to the U.S. create a thriving ecosystem for innovation. Key Sectors: Fintech: Mexico City is a leading fintech hub, with over 200 startups securing more than $600 million in venture funding, accounting for over 20% of venture funding in the country. E-commerce: The city's vast consumer market has led to the rise of successful e-commerce platforms. Software Development: A growing pool of tech talent supports a robust software development industry. Notable Startups and Companies: Kavak: A used-car marketplace that has become one of Mexico's prominent startups. Clip: A fintech company simplifying digital payments, contributing significantly to financial inclusion. Bitso: A cryptocurrency exchange platform facilitating digital asset transactions in Latin America. Albo: A neobank offering digital banking solutions to Mexican consumers. Top VCs in Mexico City, Mexico: Check out the full list of VCs located in Mexico City. 1. COMETA About: COMETA is a venture capital firm that invests in early-stage technology companies targeting Spanish speaking markets. Thesis: The first fund, VARIV I, which started making investments in 2013, was focused on e-commerce and its enablers, namely, payments and logistics. Over 10 investments were made in those categories expanding the geographic scope from Latin America to Spain. In 2015, the Firm raised a second fund, VARIV II, to capture the emerging opportunities in fintech, marketplaces, and first-generation enterprise businesses founded by local entrepreneurs. Pepe Bolaños, who joined the Firm as Principal in 2014, became Partner in 2017. Throughout the four-year investment period, sixteen companies were added to the firm’s portfolio and the scope broadened to include the US. 2. Jaguar Ventures About: Jaguar Ventures is a venture capital firm that seeks to invest in firms operating in the technology sector. Traction metrics requirements: Companies should have at least US$50k in monthly revenues, growing at more than 10% per month. Thesis: Focused on early stage ventures in Latin America. 3. Hi Ventures About: Hi Ventures invests in Latin American founders and is an early-stage venture capital fund based in Mexico. Thesis: Hi’s investment thesis participates deeply and actively in the Fintech, Future of Commerce, Human Capital and Smart Cities sectors, which are all experiencing a strong acceleration shift at a regional level.Across four portfolios, the fund has invested in 40+ innovative and successful companies led by founders who share our vision to democratize access to services and fix large inefficient industries throughout the region. 4. Smart Impact About: Smart Impact is a launching platform for hardware and circular economy startups that use technology and the internet to create meaningful change. Thesis: At Smart Impact you will discover, develop, experiment, prototype, test and launch your business. 5. Dalus Capital About: Investing in the best entrepreneurs developing scalable solutions for significant problems in LATAM. Sweetspot check size: $ 4M Traction metrics requirements: We are focused on early-stage financing rounds, in startups that have a validated product and client traction. Thesis: Dalus Capital invests in tech companies with scalable solutions to address significant problems in Latin America, in four investment themes: Inclusion (Fintech, Edtech, Healthtech, HRtech), Climate Innovation, Business Productivity (SaaS, etc.) and Digital Consumer (D2C, marketplaces). 3. Buenos Aires Buenos Aires stands as Argentina's premier tech hub, renowned for its rich talent pool, entrepreneurial spirit, and significant investment growth. The city accounts for more than 50% of the country's tech startups, with over 3,000 startups calling Buenos Aires home. Key Sectors: Software Development: Buenos Aires is a major player in the LATAM software development industry, featuring more than 50,000 software developers. Agtech: The city is home to numerous startups and investors focusing on agricultural technology, contributing to the sector's growth in Argentina. Blockchain: Buenos Aires hosts a vibrant blockchain community, with companies like Ripio leading the way in digital finance platforms. Notable Startups and Companies: Mercado Libre: Founded in Buenos Aires, MercadoLibre is the largest e-commerce platform in Latin America, with 668 million visits per month across 18 countries. Ualá: A fintech company based in Buenos Aires, Ualá offers a mobile banking app and has over five million users across Argentina, Mexico, and Colombia. Globant: A global IT and software development company headquartered in Buenos Aires, Globant provides services to clients like Google and Spotify. Top VCs in Buenos Aires: Check out the full list of VCs located in Buenos Aires. 1. Kaszek Ventures About: Kaszek is a venture capital firm that partners with exceptional entrepreneurs to build lasting, high-impact technology-based companies whose main focus is Latin America. In addition to capital, Kaszek offers significant strategic guidance, hands-on operational support and access to local and international networks. The firm is industry and stage agnostic, investing mainly in seed, series A and series B. Thesis: Our core is technology: We are big believers in the fabulous impact that new technologies can have over humankind. Therefore, we invest in any industry where technology and innovation, in any form, offer a chance of significant disruption and value creation. So far, we have invested in industries such as financial services, education, healthcare, ecommerce, marketplaces, enterprise software, and SaaS, among others. 2. NXTP Ventures About: NXTP Ventures backs early-stage technology companies led by extraordinary entrepreneurs throughout Latin America. Sweetspot check size: $ 1M Thesis: We predominately invest in B2B companies in pre-seed stage and seed-stage companies, usually becoming the first institutional check into the business. We also invest at the Series A stage, although a little less frequently. Our typical check size for Seed rounds ranges from $500k to $3M USD and we like to lead or co-lead rounds. Sometimes, we invest as followers with a lower initial check, but with the optionality to invest more later on. For Series A investments, the typical investment size ranges from $2-5M. 4. Bogotá, Colombia Bogotá is rapidly establishing itself as a key player in Latin America’s tech ecosystem, driven by a combination of supportive government policies, a thriving startup culture, and a robust educational framework. With initiatives like the Ministry of Information and Communication Technologies (Ministry of ICT) promoting digital transformation and innovation, the city fosters an environment where fintech, healthtech, and edtech startups can flourish. This synergy between public and private sectors, combined with a skilled talent pool and increasing investor interest, positions Bogotá as a hub for technological advancement and entrepreneurship. Key Sectors: Fintech: The city is home to a growing number of fintech startups focusing on financial inclusion and digital banking solutions. Healthtech: Innovations in healthcare technology are improving patient care and access to medical services. Edtech: Educational technology companies are enhancing learning experiences and accessibility. Notable Startups and Companies: Rappi: A leading on-demand delivery platform that has expanded its services across Latin America. Platzi: An online education platform offering courses in technology and business, aiming to upskill the Latin American workforce. Laika: An e-commerce platform specializing in pet care products and services, showcasing innovation in niche markets. Top VCs in Bogotá, Colombia: Check out the full list of VCs located in Bogotá, Colombia. 1. Polymath Ventures About: Polymath Ventures is a Digital Venture Group that builds from scratch and scales disruptive tech ventures for Latin America's middle class. 5. Guadalajara, Mexico Guadalajara has established itself as a leading technology hub through a strong emphasis on innovation, talent development, and international collaborations. The city's transformation into a tech powerhouse has been driven by a combination of government initiatives, educational excellence, and the presence of global tech giants. Key Sectors: Electronics: Guadalajara is a major producer of electronic components, contributing significantly to Mexico's electronics exports. The city hosts manufacturing and R&D facilities for companies like Intel and Jabil. Software Development: With a large pool of skilled software developers and engineers, Guadalajara has become a hub for software design and IT services, attracting companies such as IBM and Oracle. Internet of Things (IoT): The city fosters innovation in IoT, with startups and established firms developing cutting-edge solutions in this rapidly growing field. Notable Startups and Companies: Kueski: A prominent fintech startup based in Guadalajara, Kueski provides online loans, offering financial services to underserved populations in Mexico. Wizeline: A global product development company with a significant presence in Guadalajara, Wizeline partners with businesses to build high-quality software solutions. Intel: Maintaining a substantial operation in Guadalajara, Intel focuses on research and development, contributing to the city's status as a tech innovation center. Top VCs in Guadalajara, Mexico: Check out the full list of VCs located in Guadalajara, Mexico. 1. Poligono Capital About: We invest in early-stage startups to develop possibilities for success through technology. Non-bank financial organization that believes in exponential capital growth through portfolio diversification and innovative vision. 2. Redwood Ventures About: Mexican venture capital fund, industry agnostic, investing in technology-based startups. Sweetspot check size: $ 200K Traction metrics requirements: Not a static number but products or services that already have product/market fit defined as a growing user base and revenues Thesis: Founded in 2017, Redwood Ventures is a venture capital fund, based in Mexico. The firm focuses primarily in seed, early-stage, and Series A investments in high-impact tech companies. The firm seeks to invest in companies that are based in North America 3. Arancia International About: In addition to our operating companies, we seek to invest in sectors that we consider to have growth potential, technology and those related to our area of ​​interest. For this reason, we have investments in various companies with high potential and international prestige. 6. Santiago, Chile The Chilean government's proactive approach, exemplified by initiatives like Start-Up Chile, has been instrumental in fostering this environment. Launched in 2010, Start-Up Chile is a seed accelerator that has supported over 3,000 startups from more than 85 countries, providing equity-free funding and a robust support network. Key Sectors: The Chilean fintech ecosystem comprises approximately 179 startups, representing a 60% increase since 2019, driven by government efforts to position the country as a fintech hub. Agritech: Agriculture remains a cornerstone of Chile's economy, and Santiago hosts numerous agritech startups innovating to improve yields and combat climate change. Technologies such as drones, artificial intelligence, and nanobubbles are being utilized to revolutionize the agricultural sector. Clean Energy: Chile's commitment to renewable energy is evident, with 45% of the country's electricity generation coming from renewable sources, including over 19% from solar photovoltaic. This focus on clean energy has spurred the growth of related technologies and startups in Santiago. Notable Startups and Companies: Betterfly: A prominent fintech startup offering a platform that combines insurance, wellness, and social impact, incentivizing healthy habits among users. Instacrops: An agritech company providing a virtual assistant that allows farmers to monitor their fields in real-time, optimizing water usage, fertilizers, and detecting pests, thereby enhancing crop yields. INTI-TECH: A clean energy startup specializing in autonomous, water-free cleaning solutions for photovoltaic plants, improving the efficiency and maintenance of solar panels. Top VCs in Santiago, Chile: Check out the full list of VCs located in Santiago, Chile. 1. Taram Capital About: We invest in teams that are transforming their industries with B2B technological solutions for SMEs and large companies, with an emphasis on SaaS and the eCommerce, Fintech, Data Driven Solutions and Web3 sectors. We focus on early-stage companies, investing in Late Seed and Series A, in startups with a presence in Chile and international projections, whose solutions address cross-cutting problems faced by companies around the world. Thesis: We invest in founders from the Andean Region (Chile, Peru, Colombia & Ecuador) leading early-stage B2B recurrent revenue companies with $0.5M - $4M ARR, primarily vertical SaaS implementing digitalization, AI and Web3 related applications. 2. Start-Up Chile About: Start-Up is a public startup accelerator created by the Chilean Government for global entrepreneurs to bootstrap their startups. 3. Impacta VC About: We help impact startups fulfill their purpose. At Impacta VC we invest in Impact Startups, which with the help of Mentors and our Co-investors grow to raise their next round of capital. Thesis: We invest in impact startups in Latin America. Impacta VC launched a U$10MM Seed Fund in the US to fund tech companies aligned with the SDGs across LATAM that leverage the partner’s network of top regional founders and VCs to achieve future financing rounds in the impact space. 7. Lima, Peru Lima's tech ecosystem is experiencing significant growth, characterized by a strong entrepreneurial spirit and expanding infrastructure that supports innovation. The city's startup scene is thriving, attracting investors and talent from across the region. Key Sectors: Edtech: Lima has become a hub for educational technology, with startups like Crehana offering online courses to upskill the Latin American workforce. Fintech: The fintech sector is leading the way in investment, accounting for 58% of total investments in 2025. Startups such as Rextie provide secure and convenient currency exchange services. Logistics Technology: Startups like Chazki are developing innovative solutions to improve logistics and delivery services in the region. Notable Startups and Companies: Crehana: An online education platform offering courses to upskill the Latin American workforce. Rextie: A fintech company providing secure and convenient currency exchange services. Chazki: A logistics startup optimizing delivery services with efficient technology solutions. 8. Santo Domingo, Dominican Republic Santo Domingo is rapidly emerging as a significant tech hub in the Caribbean, leveraging its strategic location and a strong emphasis on digital transformation. The city's proximity to major markets and its commitment to technological advancement have fostered a conducive environment for innovation and entrepreneurship. Key Sectors: Fintech: The Dominican Republic's fintech sector has experienced significant growth, with the number of fintech companies increasing from 6 in 2018 to 65 by 2024. This expansion positions the country as the eighth largest fintech ecosystem in Latin America and the leader in Central America and the Caribbean. Tourism Tech: Given the Dominican Republic's robust tourism industry, there is a growing focus on integrating technology to enhance tourist experiences and streamline operations within the sector. Innovations in this area aim to boost the country's appeal as a premier travel destination. Software Development: Santo Domingo boasts a growing tech scene with many skilled developers. The city has an impressive number of developers, and, according to the EF EPI Index, their English proficiency ranks 55 out of 113 countries. Notable Startups and Companies: AlterEstate: Provides a comprehensive cloud platform designed to streamline operations for real estate agencies, enhancing sales and property management efficiency. TagShelf: Offers an innovative AI platform that automates repetitive tasks, enabling businesses to streamline their operations by intelligently identifying and classifying various document types without human intervention. Uepa Pay: Provides an online payment management platform with a versatile API for seamless integration with various e-commerce platforms, simplifying transactions and streamlining operations for businesses. 9. Montevideo, Uruguay Montevideo has emerged as a leading tech hub in Latin America, renowned for its political stability, innovation-friendly policies, and rapidly expanding technology sector. The city's strategic location and supportive business environment have attracted startups and established tech companies, fostering a vibrant innovation ecosystem. Key Sectors: Fintech: Uruguay's fintech industry has experienced remarkable growth, with the number of fintech companies increasing from 6 in 2018 to 65 by 2024. This expansion positions the country as the eighth-largest fintech ecosystem in Latin America and the leader in Central America and the Caribbean. Agtech: Leveraging its strong agricultural heritage, Montevideo has become a hub for agtech innovation, with startups developing solutions that integrate technology into agriculture to enhance productivity and sustainability. Gaming: The city's creative industries, including video game development, have gained international recognition, contributing to Montevideo's reputation as a diverse and dynamic tech hub. Notable Startups and Companies: dLocal: A fintech company providing payment solutions for emerging markets, dLocal became Uruguay's first unicorn in 2020 and went public on NASDAQ in 2021, reflecting the country's growing fintech sector. Bankingly: Founded in 2015, Bankingly offers digital banking channels for financial institutions, enabling them to improve customer experience and expand their digital services. MooveIt: A software engineering company specializing in the design, development, and implementation of technology applications across various sectors, including education, health, fintech, entertainment, and telecommunications. 10. Medellín, Colombia Medellín has transformed into a prominent tech hub in Latin America, driven by strategic investments in innovation and a commitment to technological advancement. The city's focus on sectors such as healthtech, the Internet of Things (IoT), and artificial intelligence (AI) has been instrumental in this growth. Key Sectors: Healthtech: The healthtech sector in Colombia has experienced significant growth in recent years. As of 2023, Colombia hosts approximately 25 digital health startups, reflecting a compound annual growth rate (CAGR) of 5.6% from 2019 to 2024. Internet of Things (IoT): Medellín hosts a passionate tech community focused on advancing the IoT ecosystem. Organizations like IoT Medellín promote learning, collaboration, and innovation in data-driven technologies. Artificial Intelligence (AI): In September 2024, the World Economic Forum announced the establishment of a Centre for the Fourth Industrial Revolution in Medellín. This center aims to position the city as a leading AI innovation hub, fostering collaboration among business, government, and civil society to develop inclusive and sustainable AI strategies. Notable Startups and Companies: La Haus: An online real estate marketplace that has attracted significant investment, including a US$100 million funding round in 2021, co-led by Acrew Capital and Renegade Partners. Tributi: A Y-Combinator-backed fintech company headquartered in Medellín, automating tax filing for individuals in Latin America and offering curated financial services based on user data. Sempli: A fintech startup providing financial solutions to small and medium-sized enterprises (SMEs) in Colombia. In 2022, Sempli secured investment from CAF, reflecting confidence in Medellín's growing fintech ecosystem. Connect with LATAM Startup Investors with Visible Latin America's emerging tech hubs are driving innovation across sectors like fintech, healthtech, agritech, and more. Each hub benefits from a dynamic ecosystem supported by government policies, talent pools, and investor interest. To connect with the right investors in each city, leverage Visible’s Connect investor database. Simplify your fundraising journey and discover VCs ready to back your startup's growth. Building and nurturing strong investor relationships is crucial for your startup’s success. With Visible, you can streamline your investor updates, manage fundraising, and maintain clear communication with your stakeholders—all in one place. Give it a free try for 14 days here. Related resource: 14 FinTech Startups Shaping the Future of Finance Related resource: The Top VCs Investing in Community Driven Companies

Raise capital, update investors and engage your team from a single platform. Try Visible free for 14 days. Venture capital is relatively new. In the 80s and 90s venture capital was simply capital available to “tech” companies (e.g. silicon chips in the 90s). At the time, capital was enough of a differentiator for a VC fund to stand out. Since then, the market, and funding options available to startups, have exploded. Y Combinator launched in the mid-2000s and began transforming the space. Since then name-brand VC funds have popped up throughout the country and the globe. Now, founders are looking for more from their investors (hiring help, future capital, leadership skills, technological help, etc.). Related Resource: Seed Funding for Startups 101: A Complete Guide One of the popular funding options and resources that has popped up over time is the incubator. As put by the team at Investopedia, “An incubator firm is an organization engaged in the business of fostering early-stage companies through the different developmental phases until the companies have sufficient financial, human, and physical resources to function on their own.” Related resource: Accelerator vs. Incubator: Key Differences and Choosing the Best Fit for Your Startup What Do Incubators Do? While different incubators will likely specialize in different aspects of business building, they generally help in all of the ways below. Related resource: 10 Top Incubators for Startups in 2024 Provides Feedback & Assistance With Business Basics Incubators are generally suited to extremely early product ideas or businesses. One of the areas they are the best fit to help is by providing feedback and covering business basics. This might include things like establishing your business, brand, distribution strategy, and more. Introductions to Other Startups & Networking Opportunities Generally, incubators have cohorts or classes of startups. This means that they are seeing hundreds of startups throughout their lifecycle. Incubators are a great way to find introductions to other startups, founders, and partners they might have worked with in the past. Includes Necessary Equipment – Including High-Speed Internet Historically, incubators have a physical office space for startups to leverage. This is an opportunity for startups to save on office rent and leverage the equipment and tools they need to succeed — internet, conference rooms, desk space, etc. Access to Investors Once you’ve worked your way through an incubator, chances are you are ready to hit the ground running on your business. One of the common ways to do this is by scaling strategies you worked on during the incubator. To help with this, many incubators have demo days or a network of investors they will be able to introduce you to for a future round of financing. Related Reading: All Encompassing Startup Fundraising Guide Connections to Strategic Partners & Other Service Providers Another benefit of an incubator is the partners and service providers that they work with. Oftentimes, incubators work closely with large organizations or have individuals present with their expertise. For example, an incubator might bring in someone that is an expert in product-led growth and can help you set up your process and make introductions to potential hires. On the flip side, they generally offer discounts to service providers to help you get things started. Types of Business Incubators Incubators tend to be a proving ground for different startup ideas and products. Due to this, different types of businesses and organizations have incentives to launch an incubator. Check out some of the most common types of incubators below: Academic Institutions One of the most common types of institutions that use incubators is academic institutions — generally large universities. This is a great way to allow current undergraduate and graduate students to pursue different ideas and businesses they might have in mind. Universities can tap into their network of experienced professors to help students with all aspects of business building. Additionally, universities also offer a massive network of alumni. Non-Profit Organizations Another business that leverages incubators is non-profit organizations. Non-profits are generally trying to solve large problems that impact people across the globe. Because of this, the space generally requires innovation and new ideas to help tackle these problems. Non-profits turn to incubators to help fuel innovation in the space and uncover the next entrepreneurs suited to help. Related Reading: Impact Investors and Fund Managers to Know For-Profit Corporations Of course, for-profit corporations are very common in the incubator space. Corporations are likely looking for growth and innovation in their market and space. While they likely have teams dedicated to this in-house they also look outside their organization for areas where they can innovate and expand. Corporations will use incubators to search for new ideas and products from entrepreneurs that are in the space and can help their business grow even further. Venture Capital Firms Another common business that uses incubators is venture capital firms. VC firms are dedicated to investing in startups. Because of this, they are incentivized to help the earliest stage startups incubate their idea. This allows them to invest at a later date and get a head start on the diligence process. VC firms also have built out networks and partners that help their VC fund portfolio companies which translates well to helping the companies in their incubator. Related Reading: The 12 Best VC Funds You Should Know About What’s the Difference Between an Incubator and an Accelerator? Incubators and accelerators have both become synonymous with the startup space. While you might think they are similar or the same, they do have a number of differences. An incubator is built to help the earliest stage ideas develop their business expertise and determine if they have a viable business. Related Reading: Why Most Accelerators Fail…and Why Yours Doesn’t Have To An accelerator is best suited to help businesses that are a step further. As put by the team at TechTarget, “A startup accelerator is a business program that supports early-stage, growth-driven companies through education, mentorship and financing. Startups typically enter accelerators for a fixed period of time and as part of a cohort of companies. While accelerator programs can provide beneficial resources to organizations at all stages of development, most focus on those that are pre-revenue.” This means that these companies already have a business model and product in place and are ready to hit the ground running on their revenue growth and product development. Top Incubators for Startups 1. 1871 One of the largest tech incubators globally, 1871 supports over 400 startups through mentorship, educational programming, and networking opportunities. It offers a collaborative space and access to investors and corporate partners​​. 2. Betaworks Betaworks invests, accelerates, and builds companies and projects from scratch — our focus right now is on AI and Augmentation, LLM's, NLP, web3 rails and applied machine learning. 3. Antler Antler is a global startup generator and early-stage VC that is building the next big wave of tech. With the mission to turn exceptional individuals into great founders, Antler aims to create thousands of companies globally. 4. Entrepreneur First Entrepreneur First stands out by prioritizing investment in individuals rather than established startups. This incubator gathers skilled talent from across the globe, helping them form teams and launch new ventures from the ground up. In 2024, Entrepreneur First remains a trailblazer in redefining the conventional incubator model, emphasizing a talent-first strategy that drives innovation right from the inception of a company. 5. DMZ A global startup ecosystem, DMZ at Toronto Metropolitan University equips the next generation of tech entrepreneurs with the tools needed to build, launch and scale highly impactful startups. By providing connections to customers, coaching, capital and a community, DMZ’s world-leading incubator programs help innovators reach the next milestone in their entrepreneurial journey – whatever that might be. Through its award-winning programming, DMZ has helped 800+ startups raise $2.69 billion in capital and create 5,100+ jobs. Headquartered in Toronto, Canada, with globally-accessible programming, DMZ has a widely-recognized international presence with offices in Vietnam, India and the U.S., and partnerships across North America, Latin America, Africa and Asia. Learn more at dmz.to. 6. Idealab Idealab is a business incubator providing capital, resources and advice for tech startups. Idealab continues to explore a range of technology frontiers. New models for improving the search experience are at the core of several companies currently growing inside of Idealab. Moving beyond the Internet, we have spawned companies with breakthrough technologies in robotics, renewable energy and automotive design and production among others. Idealab also continues to partner with leading venture capital firms and other strategic investors to provide the resources to maximize the potential of these companies. 7. TechNexus We build ecosystems by finding, funding, and accelerating technology ventures in collaboration with entrepreneurs and enterprises. We invest globally in early stage companies through vertical focused funds backed by leading corporate partners and leverage those unique enterprise relationships post-investment to drive accelerated venture development. Is an Incubator Right for You? Incubators aren’t for everyone. If you’ve got an understanding of your business model and product, you are likely ready to skip over the incubator and hit the ground running on your business. To learn how you can take your business to the next level, subscribe to the Visible Weekly – we search the web for the best tips to attract, engage and close investors, then deliver them to thousands of inboxes every week. Subscribe here.

Managing a high burn rate can be a make-or-break factor for startups. Without effective cost control, even promising ventures can quickly deplete their cash reserves, jeopardizing their long-term sustainability. Understanding what constitutes a healthy burn rate and how it affects your company’s financial runway is critical. In this article, we’ll explore eight actionable strategies for reducing burn rate, from cutting non-essential expenses to optimizing marketing efforts and leveraging automation. By implementing these techniques, you can extend your financial runway and ensure your startup maintains momentum on the path to growth. Related resouce: Burn Rate: What It Is and How to Calculate It What Is a Healthy Burn Rate? A healthy burn rate for a startup is the rate at which it spends its cash reserves before generating positive cash flow, tailored to its specific stage, industry, and growth objectives. Early-stage startups often experience higher burn rates due to investments in product development and market penetration, while later-stage companies typically aim for more controlled spending as they approach profitability. Industry norms also play a significant role. For instance, technology startups may have higher burn rates compared to service-based businesses, reflecting the capital-intensive nature of tech ventures. Market conditions further influence what constitutes a healthy burn rate. Investors might tolerate higher burn rates in bullish markets with abundant funding to accelerate growth. In contrast, during tighter financial climates, a lower burn rate becomes crucial for sustainability. Ultimately, a healthy burn rate aligns with the startup's strategic goals, ensuring sufficient runway to achieve key milestones without compromising financial stability. Regular financial assessments are essential to maintaining this balance, allowing startups to adapt their spending in response to evolving internal and external factors. How Does Burn Rate Impact a Company's Runway and Sustainability? A company’s burn rate determines its financial runway- the time it can continue operating before exhausting its cash reserves. The higher the burn rate, the shorter the runway, which puts pressure on the company to either increase revenue, secure additional funding, or cut costs to avoid running out of cash. Managing burn rate is crucial for long-term sustainability. A balanced burn rate allows startups to achieve key milestones, such as product development or market fit, without facing financial distress. Conversely, an unchecked burn rate can force premature fundraising or lead to insolvency. By aligning spending with strategic goals and maintaining adequate cash reserves, startups can extend their runway, weather market fluctuations, and position themselves for sustainable growth. Related resource: How to Calculate Runway & Burn Rate 8 Strategies for Managing and Reducing Burn Rate Controlling your burn rate is essential to ensure your startup's financial health and longevity. By implementing effective cost-saving measures, you can extend your runway, reduce financial stress, and create a more sustainable path to growth. The following eight strategies offer practical ways to manage spending, improve efficiency, and optimize your operations without compromising your momentum or key objectives. Related resource: The Standard Metrics to Collect for VC Portfolio Monitoring 1. Assess and Cut Non-Essential Expenses Through Regular Financial Audits Conducting regular financial audits helps startups identify non-essential expenses and eliminate wasteful spending. By systematically reviewing all outgoing costs, you can spot inefficiencies, redundant services, and underutilized resources that drain your cash reserves. For example, subscriptions to no longer-used software tools, unnecessary office perks, or overlapping vendor services can add up over time. Financial audits clarify where your money is going and help you make data-driven decisions to cut or reallocate funds. Implementing these audits quarterly or bi-annually ensures that spending aligns with business priorities, keeping your burn rate in check while maintaining operational efficiency. 2. Optimize Marketing Efforts by Focusing on Lower-Cost Channels With Long-Term Benefits Startups can reduce burn rate by prioritizing cost-effective marketing channels that provide sustained returns. Instead of investing heavily in paid ads, consider channels like content marketing, SEO, and email marketing, which offer long-term visibility without continuous spending. High-quality blog posts, guides, listicles, and case studies can drive organic traffic over time, building brand authority and attracting leads. Leverage social media marketing to engage with your audience directly. Platforms like LinkedIn, Twitter, Instagram, Quora, and Reddit allow you to share valuable content and connect with potential customers without significant ad spend. Additionally, referral programs and word-of-mouth marketing can generate new business through existing customers. By focusing on these lower-cost, high-ROI strategies, you create sustainable growth and reduce dependency on expensive, short-term campaigns, helping maintain a healthy burn rate. 3. Outsource Non-Essential Tasks Outsourcing non-essential tasks can significantly reduce overhead and operational costs for startups. Functions such as administrative work, customer support, bookkeeping, and IT maintenance can often be delegated to external agencies or freelancers. This approach allows you to avoid the expenses associated with full-time hires, such as salaries, benefits, and office space. By outsourcing, startups can also gain access to specialized skills and expertise without investing in extensive training or long-term commitments. This flexibility helps you scale operations up or down based on demand. Additionally, outsourcing enables your core team to focus on strategic priorities, like product development and customer acquisition, driving growth while keeping your burn rate manageable. 4. Delay Non-Essential Investments Prioritizing critical expenditures and delaying non-essential investments is a key strategy for managing your startup's burn rate. Focus on spending that directly supports product development, customer acquisition, and achieving key milestones. Investments in office upgrades, non-essential software, or secondary product features can often be postponed until your financial position is more secure. This approach helps preserve cash reserves and extends your runway, giving you more time to reach profitability or secure additional funding. Regularly assess potential investments through the lens of immediate impact and long-term value. By distinguishing between “must-have” and “nice-to-have” expenditures, you ensure that every dollar spent contributes to your startup’s core objectives. 5. Leverage Technology for Automation Leveraging automation and AI technology helps streamline operations, reduce labor-intensive tasks, and lower your startup's burn rate. Automation tools can handle repetitive processes like data entry, invoicing, customer onboarding, and email follow-ups. AI-powered solutions take this a step further by optimizing tasks such as customer support, marketing, and analytics through intelligent decision-making and data processing. For example, CRM platforms can personalize customer interactions and automate follow-ups, while AI writing tools can generate blog posts, social media content, and email campaigns quickly and efficiently. Chatbots powered by AI can handle complex customer inquiries, providing immediate responses and reducing the need for additional support staff. Additionally, Analytics platforms can offer actionable insights to enhance business strategies and improve operational efficiency. By integrating automation and AI, startups can increase efficiency, minimize human error, and free up team members to focus on strategic tasks. This not only reduces operational costs but also enhances productivity and competitiveness, helping maintain a lean and sustainable burn rate. 6. Establish Approval Policies for Purchases to Prevent Unnecessary Spending Implementing strict purchase approval policies helps maintain financial discipline by ensuring every expenditure is justified and aligned with your startup’s goals. Without a clear process, impulse spending or redundant purchases can quickly inflate your burn rate. Approval workflows require team members to submit purchase requests for review, giving managers or finance leads the opportunity to evaluate the necessity and impact of each expense. These policies can be tailored to your startup’s needs- for example, setting thresholds where low-cost items need minimal approval while larger purchases require multiple sign-offs. Using expense management software can streamline this process by providing transparency and real-time tracking of purchases. 7. Increase Your Cash Reserves Building and maintaining healthy cash reserves is essential for safeguarding your startup against cash flow challenges. A solid financial buffer provides flexibility during market downturns, unexpected expenses, or periods of slow revenue growth. Here are a few strategies to help increase your cash reserves: Monitor and Cut Unnecessary Expenses: Conduct regular financial audits to identify and reduce non-essential spending. Redirect those savings directly into your cash reserves. Negotiate Payment Terms: Work with suppliers and vendors to extend payment terms, allowing you to hold onto cash longer. Also, encourage clients to pay promptly or offer discounts for early payments to improve cash flow. Secure Recurring Revenue: Focus on building subscription-based or retainer models to ensure a steady income stream, reducing the risk of cash flow disruptions. Allocate a Portion of Profits: When your business is generating a profit, allocate a percentage directly to your reserves to steadily build a financial cushion. Consider Bridge Financing: Short-term financing options like lines of credit can serve as a backup to protect against cash shortages, though they should be used cautiously. 8. Consider External Funding Options Carefully When exploring external funding, it's crucial to evaluate options that align with your startup’s long-term objectives and financial stability. While venture capital, angel investments, loans, and grants can provide the necessary capital to extend your runway, each option comes with its own implications. Equity financing, such as venture capital or angel investment, dilutes ownership but can provide significant capital and strategic support. Ensure potential investors share your vision and growth goals to avoid conflicts down the road. In contrast, debt financing (like loans or lines of credit) allows you to retain ownership but requires regular repayments, which can strain cash flow if not managed carefully. Evaluate funding sources based on their impact on your burn rate, control, and repayment terms. Consider alternative options like revenue-based financing, where repayments scale with your income, or government grants, which don’t require repayment but may have specific conditions. Support Your Funding Efforts With Visible Reducing your burn rate is crucial for extending your financial runway and ensuring long-term sustainability. By cutting non-essential expenses, optimizing marketing, leveraging automation, and carefully managing investments and funding, your startup can operate efficiently and stay resilient in challenging markets. Visible can help you navigate your funding journey with ease. From managing investor updates to tracking your financial performance, Visible's platform streamlines the process and keeps your investors informed. Give it a free try for 14 days here. Related resource: Portfolio Data Collection Tips for VCs

Managing your startup's finances effectively can be the difference between thriving and running out of cash. One critical metric every founder should know is burn rate- the rate at which your company spends capital to stay operational. Calculating and controlling burn rate helps you forecast your financial runway, optimize spending, and avoid unexpected cash crunches. This guide will break down burn rate, how to calculate it, what a good burn rate looks like, and best practices for keeping it under control. Related resource: How to Reduce Burn Rate: 8 Cost-Saving Strategies for Startups What is Burn Rate? Understanding your startup's burn rate is crucial for effective financial management and long-term success. Burn rate refers to the pace at which a company consumes its cash reserves to cover operating expenses before generating positive cash flow. Monitoring this metric helps founders assess their financial runway- the time a company can operate before needing additional funding or achieving profitability. By keeping a close eye on burn rate, startups can make informed decisions about budgeting, scaling operations, and fundraising strategies. Gross Burn Rate Gross burn rate represents the total cash outflow a company incurs monthly to fund its operations, excluding any revenue generated. This includes all operating expenses such as salaries, rent, utilities, and other overhead costs. Calculating the gross burn rate provides insight into the company's spending habits and cost structure, serving as a baseline for evaluating financial health. Net Burn Rate Net burn rate accounts for the company's revenue, reflecting the actual monthly cash loss after subtracting total revenue from total expenses. This metric offers a clearer picture of how quickly a company is depleting its cash reserves, considering both income and expenditures. Monitoring the net burn rate is essential for understanding the sustainability of current operations and planning for future financial needs. By differentiating between gross and net burn rates, startup founders can gain a comprehensive understanding of their financial standing, enabling them to make strategic decisions to extend their runway and achieve long-term success. How to Calculate Burn Rate Now that you understand what burn rate is and why it’s crucial, let’s explore how to calculate it. There are two main types of burn rates to consider: gross burn rate and net burn rate. Both metrics help provide a snapshot of your startup’s financial health, but they serve different purposes. Gross burn rate focuses purely on expenses, while net burn rate factors in revenue. Here's how to calculate each type. Related resource: How to Calculate Runway & Burn Rate Calculating Gross Burn Rate Gross burn rate refers to a startup's total operating expenses within a specific period, usually calculated monthly. It includes costs such as salaries, rent, utilities, and other overhead expenses. This metric highlights how much cash the company spends to keep operations running, independent of any revenue. Understanding gross burn rate helps identify key cost drivers and assess operational efficiency. Source Calculating Net Burn Rate Net burn rate measures how quickly a company is depleting its cash reserves after accounting for revenue. It’s calculated by subtracting monthly revenue from monthly operating expenses. This metric reveals how much cash a startup needs to sustain operations each month. However, since revenue can fluctuate, it’s essential to monitor this variability. If revenue drops while expenses remain constant, the net burn rate will increase, potentially shortening the company's financial runway. Source What Is a Good Burn Rate for a Startup? Determining a "good" burn rate for a startup depends on several factors, including the company’s stage, industry, available funding, and growth objectives. Early-stage startups typically have higher burn rates as they invest in product development, marketing, and team expansion. Whereas, more mature startups might aim to control burn rates while focusing on achieving profitability. Key factors to consider: Startup Stage: Pre-seed and Seed Stage: Burn rates are often higher due to heavy investment in building and launching the product. Series A and Beyond: Companies might balance growth spending with a path toward profitability, making cash efficiency more critical. Industry Norms: Industries with longer development cycles, like biotech or hardware, may experience higher burn rates compared to SaaS or e-commerce startups. Funding Availability: Startups with recent funding rounds may sustain higher burn rates to accelerate growth. A common guideline is to ensure your burn rate allows for at least 12-18 months of runway between funding rounds. Growth Goals: High-growth startups might intentionally maintain a higher burn rate to capture market share quickly, while those focusing on sustainability may aim to keep burn rate low to extend their runway. Ultimately, a good burn rate balances growth ambitions with financial sustainability, ensuring your startup doesn’t run out of cash before achieving critical milestones. Related resource: Startup Metrics You Need to Monitor Best Practices for Managing Burn Rate Effectively managing your burn rate is essential to ensure your startup's financial health and longevity. By keeping your burn rate under control, you can extend your runway, make the most of your funding, and improve your chances of reaching key milestones. The following best practices will help you optimize spending, increase operational efficiency, and reduce the risk of running out of cash. Regularly Review and Adjust Budgets Frequent budget reviews are essential for keeping your startup's finances aligned with your current goals and market conditions. By revisiting your budget regularly- ideally monthly or quarterly- you can identify overspending, adjust for unexpected expenses, and reallocate resources to areas that drive growth. This practice helps you stay agile and responsive, ensuring your spending reflects your startup's strategic priorities. Consistent budget assessments also make it easier to anticipate financial challenges and adapt quickly, reducing the risk of depleting cash reserves unexpectedly. Optimize Operational Expenses and Identify Unnecessary Costs Streamlining your operational expenses is a key strategy for managing burn rate effectively. Start by analyzing all business expenses to identify non-essential costs that can be reduced or eliminated. Consider the following strategies: Negotiate Contracts: Review contracts with vendors, landlords, and service providers to secure better rates or more favorable terms. Embrace Automation: Implement tools and software that automate repetitive tasks, saving time and reducing labor costs. Remote Work Flexibility: If possible, reduce office space or shift to a remote-first model to cut rent and utility expenses. Monitor Subscriptions and Tools: Eliminate unused or redundant software subscriptions and services that drain resources without adding value. Diversify Revenue Streams to Reduce Reliance on External Funding Relying solely on external funding can leave your startup vulnerable to market fluctuations and investor sentiment. By developing multiple revenue streams, you create a more stable financial foundation and reduce the risk of cash flow gaps. Consider these strategies for diversification: Explore New Customer Segments: Identify additional markets or demographics that could benefit from your product or service. Offer Complementary Products or Services: Introduce new offerings that align with your core business to increase revenue potential. Adopt a Subscription or Recurring Revenue Model: If applicable, recurring models can provide predictable and steady cash flow. Create Strategic Partnerships: Partner with other businesses to cross-promote services, expand distribution channels, or bundle offerings. Monetize Existing Assets: Leverage data, content, or intellectual property to create new revenue opportunities, such as licensing or premium features. Monitor Cash Flow Projections Alongside Burn Rate Combining cash flow projections with burn rate analysis is essential for maintaining financial control and making informed decisions. While burn rate shows how quickly your startup is depleting its cash reserves, cash flow projections estimate future inflows and outflows based on current trends and planned activities. Together, these metrics provide a comprehensive picture of your financial health. Why it matters: Identify Potential Shortfalls: Projections help you foresee periods when expenses might outpace income, allowing you to take corrective action early. Plan for Fundraising: Knowing your projected runway helps you time fundraising efforts to avoid running out of cash. Adjust Strategies in Real-Time: By tracking both metrics, you can quickly adapt spending plans, delay non-essential expenses, or accelerate revenue-generating activities. Improve Decision-Making: Informed by data, you can confidently decide when to invest in growth initiatives and when to tighten spending. Track Your Key Startup Metrics with Visible Understanding and managing your burn rate is essential for keeping your startup financially healthy. Calculating gross and net burn rates, reviewing budgets, optimizing expenses, diversifying revenue streams, and monitoring cash flow projections can help you make informed decisions and extend your financial runway. Staying on top of these metrics also helps you avoid unexpected cash crunches and ensures you're prepared for growth. Tools and software are a great way to keep tabs on your finances. Track key metrics, send investor Updates, and track the status of your next fundraise with Visible. Give it a free try for 14 days here. Related resource: The Standard Metrics to Collect for VC Portfolio Monitoring

Attracting top talent is a critical challenge for startup founders. Unlike large corporations, startups need creative ways to offer competitive compensation. One of the most effective incentives is offering employee stock options, which align employees' interests with the company's growth and success. There are two primary types of stock options: Qualified Incentive Stock Options (ISOs) and Non-Qualified Stock Options (NSOs). Each type offers benefits and tax implications that can impact employers and employees. Understanding these differences is crucial to selecting the right option strategy for your team. In this article, we’ll break down the key distinctions, tax considerations, and pros and cons of ISOs and NSOs to help you make informed decisions about equity compensation. What Are Qualified Incentive Stock Options (ISOs)? ISOs are employee stock options that allow employees to purchase company shares at a predetermined price, often called the strike price or exercise price. ISOs are designed to reward and retain key employees by offering favorable tax treatment, provided specific conditions are met. Unlike other forms of equity compensation, ISOs are restricted to employees only and must adhere to strict IRS guidelines. When employees exercise ISOs and hold the shares for a certain period, the resulting gains may be taxed at the more favorable long-term capital gains rate instead of ordinary income rates. This potential for tax savings makes ISOs valuable for incentivizing employees, which is critical to the company's success. However, ISOs come with eligibility requirements and time constraints that must be met to maintain their tax-advantaged status. If these conditions are not met, ISOs may be treated as NSOs for tax purposes. How Are ISOs Taxed? As mentioned above, ISOs are taxed at the capital gains rate. This means that ISO holders are subject to tax benefits as the capital gains rate is generally lower than the ordinary income rate. It is worth noting that ISOs are taxed at the time of selling the stock (not when vesting or exercising). When an employee (or person) is granted sock options there is a strike price (which is the value at the time of granting). Once an employee decides to exercise their options, they have the ability to sell their stock or hold on to the stock. If the same person sells their stock at (the fair market value) at a later date the difference between the strike price and fair market value is the profit — or what the employee is taxed on.Check out the long-term capital gains tax rates in 2024 (for the US) below: Forbes The Impact AMT Has on ISOs The Alternative Minimum Tax (AMT) is a parallel tax system designed to ensure that taxpayers, especially those with higher incomes, pay at least a minimum amount of tax regardless of deductions or credits. When it comes to ISOs, AMT can be triggered during the year you exercise your options, even if you don't sell the shares immediately. Here’s how it works: When you exercise ISOs, the difference between the fair market value of the stock at the time of exercise and the exercise price (also known as the strike price) is called the bargain element. While this bargain element isn't taxed under the regular tax system until you sell the shares, it is considered taxable income under the AMT system. This can lead to an unexpected AMT liability, particularly if the spread between the exercise price and the FMV is significant. For example, if your strike price is $10 per share, and the FMV when you exercise is $50 per share, the $40 difference per share could be subject to AMT. The AMT calculation ensures you pay the higher amount between your regular tax liability and your AMT liability. If AMT applies, you’ll need to pay it in the year of exercise, even if you haven't sold the shares and realized the cash. However, when you eventually sell the shares, you may be eligible for an AMT credit, which can help offset future regular tax liabilities. Because of the potential AMT impact, it’s essential to plan the timing of your ISO exercises carefully. Consider consulting a tax professional to assess the potential AMT exposure and how it might affect your overall tax strategy. What Are Non-Qualified Stock Options (NSOs)? NSOs are a type of equity compensation that gives recipients the right to purchase company shares at a predetermined exercise price or strike price. Unlike ISOs, NSOs can be granted to a broader group, including employees, contractors, board members, and advisors. NSOs are more flexible than ISOs because they are not subject to the same IRS restrictions. However, this flexibility comes with different tax treatment. When NSOs are exercised, the difference between the fair market value (FMV) of the stock at exercise and the exercise price is treated as ordinary income. Later, if the shares are sold, any additional profit is subject to capital gains tax (short-term or long-term, depending on how long the shares are held after exercise). NSOs are popular among startups because they are straightforward to administer, offer flexibility in who can receive them, and provide potential tax deductions for the company when exercised. How Are NSOs Taxed? NSOs are taxed immediately upon exercise. The difference between the exercise price and the fair market value (FMV) at exercise is treated as ordinary income and subject to withholding taxes. When the shares are eventually sold, any further gains are taxed as capital gains (short-term or long-term, depending on how long the shares are held after exercise). The Impact AMT Has on NSOs As we mentioned earlier, an alternative tax minimum (AMT) is a potential downside of ISOs. Unlike their counterpart, NSOs are not subject to AMT. Key Differences Between ISOs and NSOs While both ISOs and NSOs allow recipients to purchase company stock at a predetermined price, they differ significantly in terms of eligibility, tax treatment, regulatory requirements, and reporting obligations. These differences can impact your company's approach to rewarding employees, advisors, and other contributors and the potential financial outcomes for recipients. Let’s break down the key differences to help you decide which option best aligns with your company's goals and your team's needs. Eligibility ISOs are reserved exclusively for company employees. They cannot be granted to independent contractors, board members, or advisors. This restriction makes ISOs a targeted tool for retaining key employees. NSOs are more flexible and can be issued to employees, contractors, board members, and advisors. This broader eligibility allows startups to reward internal team members and external contributors. Tax Treatment ISOs offer favorable tax treatment if specific holding periods are met. When you exercise ISOs, there is no immediate tax liability unless the alternative minimum tax applies. If you hold the shares for at least 1 year after exercise and 2 years after the grant date, gains are taxed as long-term capital gains, which typically have lower rates than ordinary income. NSOs, on the other hand, are taxed immediately upon exercise. The difference between the exercise price and the fair market value at exercise is treated as ordinary income. When you sell the shares, any further gains are taxed as capital gains (short-term or long-term, depending on the holding period). Regulatory Requirements ISOs are subject to stricter regulatory guidelines under the Internal Revenue Code. To qualify for favorable tax treatment, ISOs must meet the following requirements: Eligibility: Only employees can receive ISOs. Holding Period: Shares must be held for at least 1 year after exercise and 2 years after the grant date to benefit from long-term capital gains tax rates. Exercise Limits: The total value of ISOs exercisable in a calendar year cannot exceed $100,000 based on the grant date FMV. Plan Approval: The stock option plan must be approved by the company’s shareholders within 12 months before or after the plan is adopted. Expiration: ISOs must be exercised within 10 years of the grant date (or 5 years if granted to a 10%+ shareholder). In contrast, NSOs are subject to fewer regulatory requirements. They can be granted to employees, contractors, and board members without restrictions on exercise limits or holding periods. NSOs also don’t require shareholder approval and offer more flexibility in structuring the terms of the option grant. The stricter regulations for ISOs reflect their preferential tax treatment, while the flexibility of NSOs makes them easier for startups to implement broadly. Reporting and Withholding ISOs have simpler reporting and withholding requirements compared to NSOs. When an employee exercises ISOs, there is no immediate tax withholding because the exercise itself doesn’t trigger regular income tax. However, if the employee sells the shares in a disqualifying disposition (before meeting the holding periods), the employer must report the bargain element as ordinary income on the employee’s W-2 form. The company is not required to withhold taxes on ISO exercises, though it must track and report the income if the shares are sold early. NSOs, on the other hand, trigger immediate tax withholding at the time of exercise. The bargain element (the difference between the exercise price and the fair market value at exercise) is treated as ordinary income. Employers are required to: Withhold federal and state income taxes (if applicable). Deduct Social Security and Medicare taxes (FICA). Report the income on the employee’s W-2 form (for employees) or a 1099-NEC (for non-employees). Failing to account for withholding on NSO exercises can result in underpayment penalties for the recipient. Accurate reporting and timely withholding are essential for the issuer to avoid compliance issues. Pros and Cons of ISOs ISOs offer valuable tax advantages and can help retain key employees, but they come with strict rules and potential tax complexities. Here are the key benefits and drawbacks of ISOs: Pros Favorable Tax Treatment: Gains are taxed as long-term capital gains if holding period requirements are met (1 year after exercise and 2 years after the grant date). No Immediate Tax at Exercise: Exercising ISOs doesn’t trigger regular income tax, allowing employees to defer taxes until the shares are sold. Employee Retention: ISOs can help retain top talent, as employees must stay with the company to benefit fully. No Payroll Taxes: ISOs are not subject to Social Security and Medicare taxes (FICA) at exercise. Cons Complex Tax Rules: Strict IRS requirements and holding periods must be met to maintain tax benefits. Alternative Minimum Tax (AMT): The bargain element can trigger AMT liability in the year of exercise. Limited Eligibility: ISOs can only be granted to employees, excluding contractors and advisors. Exercise Limits: Only $100,000 worth of ISOs can be exercised per year based on the grant date value. Market Risk: Employees risk holding shares that may decrease in value before they sell. Pros and Cons of NSOs NSOs offer flexibility in who can receive them and simpler regulatory requirements, but they come with immediate tax obligations. Here are the primary advantages and disadvantages of NSOs: Pros Broad Eligibility: NSOs can be issued to employees, contractors, board members, and advisors. Simpler Administration: Fewer IRS regulations compared to ISOs. No Exercise Limits: No annual limit on the value of NSOs that can be exercised. Company Tax Deductions: Companies can deduct the bargain element as ordinary income when NSOs are exercised. Immediate Liquidity: Recipients can exercise and sell shares immediately for cash. Cons Immediate Tax Liability: The bargain element is taxed as ordinary income at exercise. Withholding Requirements: Employers must withhold federal, state, Social Security, and Medicare taxes. No Tax Deferral: Taxes are due upon exercise, regardless of when the shares are sold. Market Risk: If the stock price drops after exercise, recipients may owe taxes on a higher value than the shares are worth. Potential Financial Strain: Recipients need cash to cover taxes at the time of exercise. ISO vs NSO Which One is Right For You? Now that we understand the difference between qualified incentive stock options (ISOs) and non-qualified incentive stock options (NSOs) it’s time to understand how and when you should be using both. Both have expected use cases and their own set of pros and cons depending on the use. Related Reading: How to Fairly Split Startup Equity with Founders When to Choose an ISO Of course, most employees will likely want an ISO plan as it offers tax benefits. However, it is lesser used and should be reserved for high-value employees. As the team at Investopedia writes, “This type of employee stock purchase plan is intended to retain key employees or managers.” A few times for when you should choose a qualified incentive stock option for your employees: When offering stock options for an employee (ISOs are not eligible with individuals who are not employees) When trying to incentivize and retain a high-value employee — this might be a manager or executive that is closely aligned with your companies success. When your company is in a financial position to offer ISOs instead of NSOs When to Choose an NSO While they do not necessarily have the tax benefits of ISOs, NSOs are widely used and are more common than ISOs. Below are a few examples and pros of choosing an NSO instead of an ISO: When issuing stock options to non-employees. This could be consultants, board members, mentors, and more. From the team at Pasquesi Partners, “With NSO, companies are able to take tax deductions when the employee chooses to exercise their option in the stock. Because of the way they are structured, NSO earnings are viewed as income for the employee, hence the tax deductions.” When looking for a more simple option and straightforward stock option to offer employees Share Stock Option Information With Your Investors with Visible Equity compensation, whether through ISOs or NSOs, is a powerful tool for aligning your team’s interests with your company’s success. To build trust and maintain transparency with investors, employees, and other stakeholders, clear communication about your cap table and stock options is essential. Simplify your investor reporting and engagement with Visible. From raising capital to keeping investors informed, manage everything seamlessly in one platform. Try Visible free for 14 days.

A well-maintained cap table is one of the most critical tools for startup founders navigating the complex world of equity and ownership. As a startup grows, managing and understanding equity distribution becomes essential for making informed decisions, attracting investors, and maintaining transparency. A clear cap table can help founders visualize ownership, anticipate dilution, and ensure accurate fundraising. Whether you’re preparing for investment rounds, employee stock options, or future exits, having a reliable cap table is crucial for your startup’s financial health and long-term success. What Is a Cap Table (i.e., Capitalization Table)? A cap table, or capitalization table, is a detailed spreadsheet or document that outlines a startup's equity ownership. It provides a breakdown of all the company’s securities, including common and preferred shares, options, warrants, and convertible instruments. Each entry typically includes details such as the type of security, the number of shares issued, the names of shareholders or stakeholders, and their ownership percentage. Cap tables also help illustrate how ownership evolves over time, especially after significant events like fundraising rounds, employee stock option grants, or equity transfers. A comprehensive cap table allows founders, investors, and employees to understand who owns what portion of the company and how that ownership could be diluted in future scenarios. Related resource: Emerging Fund Managers You Want on Your Cap Table What Is the Difference Between a Cap Table and a Term Sheet? While both a cap table and a term sheet play crucial roles in a startup’s equity management and fundraising, they serve distinct functions and provide different types of information. Cap Table:A cap table is a current snapshot of a company’s ownership structure. It details all the securities issued, such as shares, options, warrants, and convertible notes, and specifies who owns them. The cap table evolves with each new investment, equity issuance, or employee stock grant. It helps founders and investors understand who owns what percentage of the company, track dilution, and plan for future fundraising. Term Sheet:A term sheet is a forward-looking proposal provided by an investor during a funding round. It outlines the terms and conditions of a potential investment, such as the amount of capital being invested, the company’s valuation, equity percentage, liquidation preferences, voting rights, and other key terms. A term sheet is non-binding (except for certain confidentiality or exclusivity clauses) and serves as the basis for negotiating and drafting the final investment agreement. In summary: The cap table is a snapshot of the company’s current equity structure. The term sheet sets the groundwork for future changes to the cap table based on agreed-upon investment terms. Both documents are critical during fundraising, but they address different aspects of the process- one tracks equity, and the other negotiates terms. Related resources: 6 Components of a VC Startup Term Sheet (Template Included) Navigating Your Series A Term Sheet Why Is a Cap Table Important for Startups? A cap table is essential for maintaining transparency, managing equity, and making informed business decisions as your startup scales. It provides a clear view of who owns what, how ownership changes over time, and the potential impact of future investments or stock option grants. For founders, a cap table helps protect against excessive dilution and ensures strategic equity allocation. It offers investors insight into the company’s ownership structure and potential risks. Without an accurate and up-to-date cap table, startups can face challenges during fundraising, audits, or key financial decisions, making it a foundational tool for growth and sustainability. Understanding the Ownership Breakdown of Founders, Investors, and Employees Founders must always be aware of what their cap table means for ownership of their company. Understanding ownership is critical as the company grows and develops. Cap tables tell investors who owns what part of a company. Current investors want to see who has control. They also want the ability to forecast potential payouts and dilution under specific scenarios based on the ownership split. The breakdown of ownership in a startup can affect the company's overall value for future fundraising rounds, as well as who needs to be at the table for certain critical company decisions. Related Resources: How to Fairly Split Startup Equity with Founders Understanding Contributed Equity: A Key to Startup Financing Monitoring Equity Value and Tracking Company Valuation Monitoring equity value and tracking company valuation are crucial for both employees and investors. An up-to-date cap table provides a transparent view of how much the company is worth and how each stakeholder’s equity is affected by funding rounds, option grants, or changes in ownership. A well-maintained cap table helps all stakeholders understand how ownership changes, ensuring alignment and confidence in the company’s growth trajectory. By consistently monitoring equity value, startups can facilitate fair and transparent equity management, essential for long-term success. For Employees: Employees who hold equity, such as stock options, need to understand the potential value of their shares. A detailed cap table helps them see how their ownership stake evolves over time, providing clarity on the potential value of their equity and how it may be diluted with new investments. This transparency can also increase motivation and align their interests with the company’s growth. For Investors: Investors rely on the cap table to evaluate their ownership percentage, potential returns, and dilution risk. By tracking the company’s valuation over time, investors can assess whether their investment is growing in value and determine how future funding rounds will impact their stake. Accurate valuation data also informs strategic decisions during follow-on investments or exit planning. Facilitating Fundraising Rounds with Transparency and Accuracy In addition to current investors utilizing a cap table for forecasting and dilution predictions for different investment outcomes, potential investors and future fundraising can also be affected by cap tables. By viewing a cap table, potential investors can evaluate how much control and leverage could be maintained during negotiations. Historical insight provided in a cap table can affect negotiating current valuation for new funding raises. Additionally, an existing shareholder can easily determine what percentage of the company to give to the new investors in exchange for the capital contributed. Preparing for Financial Audits and Regulatory Compliance Maintaining an accurate and up-to-date cap table is essential for startups to ensure compliance with legal and regulatory requirements. Regulatory authorities and auditors often require companies to present their cap tables annually, ensuring adherence to legal standards and facilitating processes such as capital rounds and ownership changes. A well-maintained cap table provides a transparent record of the company's equity structure, which is crucial for: Regulatory Filings: Accurate cap tables are necessary for filings with regulatory bodies, such as the Securities and Exchange Commission (SEC), to comply with securities laws and regulations. Tax Reporting: Proper documentation of equity ownership and transactions ensures compliance with tax obligations and helps avoid penalties and legal issues. Investor Relations: Transparency in equity distribution builds trust with investors, demonstrating responsible management and adherence to legal standards. Why Do Investors Want to See the Cap Table? Investors want to review a startup’s cap table because it offers a comprehensive snapshot of the company’s ownership structure. This transparency is crucial for assessing risk, understanding equity dynamics, and making informed investment decisions. A well-maintained cap table helps investors evaluate several key aspects: Equity Distribution: Investors can see how ownership is split between founders, employees, and previous investors. This helps them gauge how much control the founding team retains and identify any potential risks related to future decision-making authority. Dilution Risk: The cap table reveals how new investments might dilute existing ownership. Investors need to understand how their stake may change in future funding rounds and whether the current equity structure leaves room for sustainable growth. Investor Rights and Preferences: A detailed cap table shows who holds preferred shares, warrants, or convertible instruments. This helps investors understand potential liquidation preferences and voting rights, which can affect exit strategies and return on investment. Potential Red Flags: A cap table can highlight any irregularities, such as over-diluted founders or complicated equity structures that might hinder future fundraising. What Does a Cap Table Look Like? A cap table typically takes the form of a spreadsheet or specialized software-generated table that organizes the company's equity information clearly and structured. It generally includes stakeholders in rows and types of equity details in columns, making it easy to see who owns what and how much. For more complex startups, the cap table can include additional details like option pools, convertible notes, and transaction history. Key components of a cap table often include: Shareholder Names: Lists founders, employees, investors, and other stakeholders who hold equity in the company. Number of Shares: The total number of shares each stakeholder owns. Type of Security: Categories like common shares, preferred shares, stock options, warrants, or convertible instruments. Ownership Percentage: Each stakeholder's proportional ownership of the company based on their share count. Investment Date: The date each stakeholder acquired their shares or invested in the company. Valuation Details: Information on the price per share and company valuation at each investment round. Image source Does a Cap Table Show Debt? A cap table does not typically show debt. Rather, it is specifically designed to track a company's equity ownership structure, detailing shares, options, warrants, and other equity instruments. Its primary function is to outline who owns portions of the company and how ownership is distributed among stakeholders like founders, employees, and investors. However, while debt is not shown on a cap table, certain debt-related instruments might be included if they have the potential to convert into equity. For example: Convertible Notes: These are debt instruments that convert into equity at a later stage, often during a future funding round. Convertible notes are generally tracked on the cap table because they will eventually affect ownership percentages once converted. SAFEs (Simple Agreements for Future Equity): Similar to convertible notes, SAFEs are agreements where investors provide funding in exchange for the right to future equity, and they typically appear on the cap table before conversion. Traditional loans or other forms of debt (e.g., bank loans, lines of credit) are tracked separately in the company’s financial statements, such as balance sheets, rather than on the cap table. This separation helps maintain clarity between the company’s equity structure and its liabilities. Related resources: The Startup's Handbook to SAFE: Simplifying Future Equity Agreements SAFE Fundraising: When to Consider & Benefits Information to Include in a Cap Table There is no fixed format for a cap table, but a comprehensive cap table should include key components that provide a clear picture of the company's equity structure. These components ensure transparency for founders, investors, and employees, helping to avoid misunderstandings and potential errors during fundraising, audits, and strategic planning. Here are the essential elements to include: Shareholders and Stakeholders: A list of all individuals and entities that hold equity in the company, including founders, employees, angel investors, venture capital firms, and advisors. This helps identify who owns portions of the company and their respective roles. Equity Details: Information on the type of equity held, such as common shares, preferred shares, stock options, warrants, and restricted stock units (RSUs). Each entry should specify the number of shares issued and any associated terms. Valuation and Ownership: Details on the company's valuation at different stages (e.g., pre-money and post-money valuations) and the percentage of ownership each stakeholder holds. This helps illustrate how equity is distributed and how ownership changes with new investments. Option Pool: The number of shares allocated for current and future employees as part of an equity incentive plan. The option pool is important for understanding potential dilution and planning for new hires. Related resource: The Essential Guide to Option Pools: Definition, Purposes, and Benefits for Startups Convertible Instruments: Any convertible notes, SAFEs (Simple Agreements for Future Equity), or other instruments that may convert into equity in the future. These should include details such as the conversion terms, amounts, and potential dilution impact. Transaction History: A record of all equity-related transactions, including issuance dates, purchase prices, investment rounds, and transfers. This historical data is crucial for maintaining accuracy and demonstrating compliance during audits. Restrictions and Agreements: Information on any restrictions or agreements related to equity, such as vesting schedules, buyback rights, or shareholder agreements. This helps stakeholders understand the conditions attached to their equity and any limitations on transferring shares. How Do You Make a Cap Table? Cap tables can be created and managed in a variety of ways. Typically, it is common for new startup founders to build their initial cap table in a spreadsheet. However, as your startup grows and the valuation and stakeholders get more involved and complex, a simple cap table design in a program like Excel won’t work. Some companies will use tools like CapShare or Carta, to build and manage their cap tables. These tools are typically more dynamic and less manual than managing via Excel. They can be easier to utilize to share out and circulate with employees and investors. In other scenarios, it might make the most sense to outsource the production and management of a cap table. When founders choose to self-manage their own cap table, they are susceptible to risks. Some of these risks include miscalculating valuations, which can lead to giving up too much equity and over-diluting shares in new investment rounds. Additionally, there might be tax consequences or legal issues arising from the mismanagement of a cap table. By outsourcing the production and management of a cap table. Typically, this management is outsourced to a legal team to ensure accuracy and compliance. Outsourcing is more expensive than managing with a software but can be much less expensive at the cost of major mistakes or miscalculation of value. How to Use a Cap Table? When using a cap table, it’s important to understand the following formulas: Post-Money Valuation = Pre-Money Valuation + Total Investment Amount Price-Per-Share = Pre-Money Valuation / Pre-Money Shares Post-Money Shares = Post Money Valuation/ Price-Per-Share Investor Percent Ownership = Investor Shares / Post-Money Shares These formulas are essentially what will be laid out in a cap table so understanding them is crucial. These formulas can also be used to update the cap table as it grows more complex via different significant financial rounds. The more investment rounds or other significant financial changes on the table, the more complex the cap table gets. This breakdown essentially showcases the additional steps and participants who are stakeholders in the startup. Founders round – this is the simplest version of the cap table and will typically showcase the simple split of equity between the founders of the company. Seed round – this introduces investors to the table who now own a portion of the company along with the founders and have given cash to the startup altering the overall value. Options pool round – when options are provided for new employees, this changes the value and breakdown of the company as represented by the cap table. Overtime, as more employees are hired and more options are granted, the more complex the cap table gets. VC round(s) – With any additional funding rounds taken on by the startup, the valuation drastically changes as does the list of stakeholders on the cap table. All of these events or rounds are significant and will change the breakdown and complexity of the cap table. How Do You Keep a Cap Table Updated? With the array of cap table management tools on the market, updating and keeping tabs on your cap table is easier than ever before. Generally, founders need to stay on top of their cap table management. If you raise a new round, offer new employee grants, terminate an employee, etc., you need to make the changes as soon as possible to avoid future headaches. If you put off updating your cap table in real-time, it could end up being a costly mistake as you need a lawyer to update and correct the table. To make your life as easy as possible, we recommend using software to manage and update your cap table. There are countless options, but we recommend Pulley. You can learn more about cap table management (and Pulley) in our Founders Forward Podcast with Pulley CEO and Founder Yin Wu here. Cap Table Examples/Templates Instead of starting from scratch, many founders will use a template to build out a cap table. Check out these templates below: 1. S3 Ventures Template S3 Ventures offers a template in Excel that they recommend for their portfolio companies. 2. Eqvista Template Eqvista's template includes ownership structure and the capital committed. 3. Cap Board Template Cap Board's template is a basic cap table on Google Spreadsheet, with formulas included, that can be used for any early-stage startup. 4. CFI Template CFI’s has many free excel templates. The spreadsheet below contains two sections – valuation and ownership. All numbers in blue are hard-coded assumptions and all numbers in black are formulas. Manage Your Stakeholders Effectively with Visible Effectively managing your cap table is essential for maintaining transparency, building investor confidence, and making informed decisions. With Visible, you can streamline your stakeholder communication by centralizing key data, sharing investor updates, and tracking interactions- all in one platform. Visible makes it easy to keep investors informed and engaged while helping you stay organized and focused on growth. Ready to simplify stakeholder management? Give it a free try for 14 days here.

Managing equity is one of startup founders' most strategic and challenging responsibilities. Many advisors, investors, and peers contribute valuable insights to a business in the early stages, often without direct financial compensation. For startups with limited cash flow, offering advisory shares becomes a creative and practical way to engage experts while preserving resources for growth. Advisory shares allow founders to attract and retain top-tier talent by providing equity in exchange for critical guidance. This article explores what advisory shares are, how they work, their benefits and drawbacks, and key considerations for offering them in your startup. What Are Advisory Shares? Advisory shares are a form of equity compensation provided to individuals who offer strategic guidance and expertise to a startup. Unlike traditional employee equity, advisory shares are typically granted to external advisors, such as industry experts, seasoned entrepreneurs, or key network connectors, who help the business grow and succeed. These shares often follow a shorter vesting schedule, reflecting the limited but impactful nature of the advisor's contributions. By offering advisory shares, startups can incentivize advisors to commit their time and knowledge, aligning their success with the company’s growth. Advisor Shares vs. Regular Shares (or Equity) Advisory shares and regular shares both represent equity in a company, but their purposes, recipients, and structures are distinct. Regular shares are issued to founders, employees, and investors to reflect direct contributions, whether through work or funding. Advisory shares, however, are explicitly granted to external advisors as compensation for their expertise and guidance, aligning their interests with the company's success without requiring financial or operational involvement. Related resource: CEO vs. Advisory Board: Key Differences in Leadership and Guidance How Are Advisory Shares and Regular Shares Similar? Despite their differences, advisory shares and regular shares share common traits. Both represent ownership in the company, incentivize recipients by tying their potential financial gains to its growth, and typically involve vesting schedules to ensure commitment. Issuing either type of share also contributes to equity dilution, affecting all existing stakeholders. Related Read: The Main Difference Between ISOs and NSOs How Do Advisory Shares Work? While advisory shares can take on different forms, they typically can be boiled down to a few similarities. Of course, these can change depending on your business. Exchanged for advice or expertise Typically offered as NSO stock options Follow a shorter vesting schedule Related resource: Everything You Should Know About Diluting Shares Learn more about how advisory shares typically work below: 1. Advisor Agreement Before granting advisory shares, the startup and advisor enter into a formal agreement that outlines the terms of their relationship. This agreement specifies the advisor’s role, including the scope of their contributions, such as strategic guidance, mentorship, or leveraging their network. It also details the advisor's responsibilities, expected time commitment, and deliverables. Importantly, the agreement defines the number of advisory shares the advisor will receive and the terms under which they are granted, such as the vesting schedule and any conditions tied to performance. By setting clear expectations, this agreement protects both parties and ensures alignment in achieving the company’s goals. 2. Grant of Shares After finalizing the advisor agreement, the startup grants the advisor the right to purchase a specified number of shares at a predetermined exercise price. This exercise price is typically set at the fair market value of the company’s stock at the time of the grant. This approach ensures compliance with tax regulations while offering the advisor an opportunity to benefit from the company’s growth. The grant also outlines the conditions under which the advisor can exercise these options, such as meeting vesting milestones or fulfilling specific responsibilities. By linking the grant to the advisor’s contributions, startups create a mutually beneficial arrangement that aligns incentives with the company’s success. 3. Vesting Period The advisor’s right to exercise their options is generally tied to a vesting period, which ensures their continued commitment to the startup over time. Vesting periods for advisory shares often span shorter durations than employee stock options but typically last one to four years. A common structure includes a one-year cliff, where no options are vested during the first year, followed by monthly vesting thereafter. This means the advisor gains the ability to exercise a portion of their options incrementally, as they fulfill their responsibilities and contribute to the company’s growth. Vesting schedules protect the startup by ensuring advisors earn their shares through sustained involvement and expertise. 4. Exercise of Options Once the vesting period is complete, the advisor gains the right to exercise their options. This involves paying the predetermined exercise price to purchase the shares granted under the advisory agreement. The exercise process typically requires the advisor to notify the company of their intent and complete the necessary paperwork. After the payment is made, the advisor becomes a shareholder in the company and holds equity outright. This step allows the advisor to benefit from any future increase in the company’s valuation, aligning their financial incentives with the startup’s long-term success. 5. Potential Profit If the company’s stock price appreciates over time, the advisor can sell their shares for a profit. Since advisory shares are typically granted at the fair market value at the time of issuance, any subsequent increase in the stock price represents a gain for the advisor. For example, if the exercise price was set at $1 per share and the stock price rises to $10 per share, the advisor can sell the shares at the higher market price, realizing a profit of $9 per share. This potential for financial gain serves as a strong incentive for advisors to contribute meaningfully to the company’s success and growth. Benefits of Advisory Shares Advisory shares come with their own set of pros and cons. Properly maintaining and distributing equity is a critical role of a startup founder so understand the benefits, and drawbacks, of offering advisory shares is a must. Related Resource: 7 Essential Business Startup Resources Learn more about the benefits of offering startup advisory shares below: Access to Expertise and Guidance Advisory shares are a powerful tool for attracting experienced professionals with specialized knowledge that can drive a startup’s growth. These individuals bring valuable insights in areas such as strategy, product development, marketing, or fundraising—critical components for scaling a business. By offering equity in lieu of cash compensation, startups can engage top-tier experts who might otherwise be out of reach financially. These advisors act as strategic partners, helping founders navigate challenges, seize opportunities, and build a strong foundation for long-term success. Related Resource: Seed Funding for Startups 101: A Complete Guide Strengthen Credibility and Network Associating with credible advisors can significantly enhance a startup’s reputation, signaling expertise and trustworthiness to the broader market. Advisors with established industry recognition lend their credibility to the company, boosting its appeal to potential investors, partners, and customers. Beyond reputation, advisors often bring extensive networks of valuable connections, opening doors to strategic partnerships, funding opportunities, and key client relationships. By aligning with respected professionals, startups can accelerate their growth while building trust within their industry. Cost-Effective Compensation As we previously mentioned, most businesses that benefit most from advisors are unable to offer them a salary or cash compensation. With advisor shares, startup founders are able to offer shares as compensation and conserve thei cash to help with scaling their business and headcount. Attract Long-Term Commitment Vesting schedules play a crucial role in fostering long-term commitment from advisors. By distributing equity over a set period, such as one to four years, advisors are incentivized to remain actively engaged with the startup for the duration of the vesting timeline. This structure ensures that advisors continue to contribute their expertise and resources while aligning their success with the company's growth. The gradual allocation of shares motivates advisors to stay invested in the startup’s achievements, creating a mutually beneficial relationship that drives sustained collaboration and progress. Drawbacks of Advisory Shares Of course, offering advisor shares is not for everyone. While there are benefits to offering advisor shares, there are certainly drawbacks as well. Weighing the pros and cons and determining what is right for your business is ultimately up to you. We always recommend consulting with a lawyer or counsel when determining how to compensate advisors. Diluted Ownership The biggest drawback for most founders will be the diluted ownership. By offering shares to advisors, you will be diluting the ownership of yourself and existing shareholders. As advisors are fully vested in 1-2 years, they will potentially not be invested in future success as other stakeholders and could be costly when taking into account the diluted ownership. Potential Conflicts of Interest Advisors might not have the same motivators and incentives as your employees and other shareholders. As their ownership is generally a smaller % and their shares vest early, they are potentially not as incentivized for the growth of your company as employees and larger % owners will be. Getting in front of these conversations and making sure you have a good read on any potential advisors before bringing them onboard is a good first step to mitigate potential conflicts. Extra Stakeholder to Manage Chances are most advisors are helping other companies as well. This means that their attention is divided and you will need to ensure you are getting enough value to warrant dilution. This also means that you are responsible for managing a relationship and communication with another stakeholder in your business — what can be burdensome on some founders. The 2 Variations of Advisory Shares Advisory shares are generally offered in 2 variations — restricted stock awards and stock options. Learn more about each option and what they mean below: Restricted Stock Awards Restricted stock awards (RSAs) are a form of equity compensation where shares are granted to an individual with certain restrictions, typically tied to a vesting schedule or performance milestones. Unlike stock options, RSAs represent ownership of the shares from the moment they are granted, though the recipient may not fully control or sell them until the restrictions are lifted. These shares often include voting rights and entitle the recipient to dividends, aligning their interests with the company’s long-term success. Restricted stock awards are commonly used to reward early contributors or advisors, ensuring their commitment while providing immediate equity ownership subject to conditions. Stock Options Stock options are a type of equity compensation that grants the recipient the right to purchase company shares at a fixed price, known as the exercise price, within a specified timeframe. Unlike restricted stock awards, stock options do not represent immediate ownership but provide the potential to acquire shares if certain conditions, such as vesting schedules or performance milestones, are met. The exercise price is typically set at the fair market value of the shares at the time of the grant. If the company’s valuation increases, the recipient can profit by purchasing the shares at the lower exercise price and selling them at the higher market value. Stock options are often used to align the recipient’s incentives with the company’s growth, encouraging active involvement and long-term commitment. Who Gets to Issue Advisory Shares? Issuing advisory shares is typically reserved for the founder or CEO of a company. Having a decision-making process and gameplan when issuing advisory shares is important. This might mean offering no shares at all, having an allocated amount of advisor shares from the get go, or something inbetween. Making sure your board of directors and other key stakeholders are on board is crucial to make sure that interest and strategy stays aligned for all stakeholders. Related resource: Is An Advisory Board Paid? What Startups Should Know How Many Shares Should You Give a Startup Advisor? Determining the number of shares to offer a startup advisor requires balancing sufficient incentives with managing equity dilution. The exact amount will vary based on factors such as the advisor’s experience, expected contribution, and time commitment. Advisors who bring extensive industry expertise or access to valuable networks may justify a higher equity allocation than those with a more limited role. According to guidelines referenced by Silicon Valley Bank, advisors are often granted between 0.25% and 1% of the company's equity, depending on the startup's stage and the nature of the advisory role. Structuring this compensation strategically- including a vesting schedule or performance milestones- helps ensure that the advisor’s contributions provide meaningful value while maintaining flexibility for the company. Let Visible Help You Streamline the Investment Management Process Managing equity and fostering investor relationships are critical for your startup’s success. Visible simplifies this process with tools for tracking advisory shares, managing fundraising pipelines, and keeping stakeholders informed through data rooms and investor updates. Raise capital, update investors, and engage your team from a single platform. Try Visible free for 14 days.