STAN Talks

On April 15, 2024, we hosted "STAN Talks: Mistakes to Avoid When Fundraising" at the Fast Creative Campus in Armenia. The event featured Stepan Khzrtian, a former corporate lawyer with over a decade of experience working with hundreds of founders across all stages of the startup lifecycle, from incorporation to exit. He quit his private practice to start Corpora, which helps founders raise money faster by automating the legal backend.With over 10 years of experience practicing corporate law, he shared his insights to avoid mistakes that can complicate fundraisers. He discussed the complexities and nuances that founders encounter at different stages of startup development, described the good and bad aspects of SAFEs and priced rounds, and shared many tips.

Here are the key takeaways from the Stepan’s presentation

• It's worth considering doing a priced round when raising $1 million or more. Although finding a lead investor can be challenging, building early relationships with venture capitalists can help. Starting a monthly newsletter for updates and inviting potential investors can make them familiar with your company when you are ready to raise funds.
• Partnering with the right legal team can help you cut down on legal expenses for your priced round. Legal fees have skyrocketed lately, with Series Seed rounds sometimes costing up to $100,000. However, you can avoid these costs by collaborating with specialized boutique law firms. Corpora offers automated priced rounds led by top-tier startup lawyers, all for a flat fee of $25,000.
• Beware of the anti-dilution concerns with stacking post-money valuation cap Safes. Instead, consider raising a priced round after you’ve done a Safe round or use Safes with a pre-money valuation cap or a discount.
• Consider using a "dilutable" post-money valuation cap Safe. Adjusting the post-money valuation cap Safe to dilute investors in each round similar to a priced round can be a good idea. However, be aware that this modification may complicate your fundraising process and require clear communication with investors to avoid misunderstandings.
• Although the Safe was introduced to simplify fundraising, mainly for pre-seed and bridge rounds, its widespread adoption has led to increased founder dilution, prolonged legal oversight, and higher legal costs over time. Beware of these downsides when raising a Safe round.

Beyond the informative sessions, the event featured extensive networking opportunities.
Attendees had the opportunity to connect with fellow founders and industry experts.