Ashish | The Founders' Stack

Writing for 19k+ founders @ Founders' Psyche & Founders' Capital. Building an AI to predict startup success using psychology + data. Documenting it here.

[Ashish | The Founders' Stack @_AshishKulkarni]

You don't get diluted by the valuation.

You get diluted by the terms sitting right next to it.

[Ashish | The Founders' Stack @_AshishKulkarni]

The terms are the relationship, written down before the relationship starts.

[Ashish | The Founders' Stack @_AshishKulkarni]

Downside protection is an investor's job.

Knowing which downside they are protecting against is yours.

[Ashish | The Founders' Stack @_AshishKulkarni]

Read the term sheet as a personality test that happens to be legally binding.

The terms someone fights for tell you how they will behave when things get hard.

[Ashish | The Founders' Stack @_AshishKulkarni]

One SAFE is simple.

Three SAFEs with three caps plus the option pool is a dilution surprise waiting at your priced round.

[Ashish | The Founders' Stack @_AshishKulkarni]

Your SAFE cap is your real valuation.

Raise at a 5 crore cap, price the round at 10, and that investor bought in at 5. Twice the ownership their cheque should get.

[Ashish | The Founders' Stack @_AshishKulkarni]

A SAFE is not "no valuation."

It is a valuation you agreed to before you knew the number.

The cap is the number.

[Ashish | The Founders' Stack @_AshishKulkarni]

Every hard term that shows up late in a raise sounds like "agree or lose the deal."

That sentence is written by your fear, not the investor.

[Ashish | The Founders' Stack @_AshishKulkarni]

Most founders don't get outnegotiated.

They get outwaited.

[Ashish | The Founders' Stack @_AshishKulkarni]

The cap table is a diary.

It records every deal you made when you were most desperate.

[Ashish | The Founders' Stack @_AshishKulkarni]

Every early round is a decision you made with less information and more fear than you have now.

You can't undo them.

You can learn to read them.

[Ashish | The Founders' Stack @_AshishKulkarni]

Control is not the same as ownership.

You can own 51% and still lose the vote that matters.
You can own 30% and keep the decisions that count.

Read the rights, not just the percentages.

[Ashish | The Founders' Stack @_AshishKulkarni]

The fear under "I don't want to dilute" is almost always "I don't want to lose control."

Different problems. Different solutions.

One is solved with equity. The other with governance.

[Ashish | The Founders' Stack @_AshishKulkarni]

A VC can read your decision making from your cap table before you say a word.

40% gone in a friends and family round tells a story.

So does 95% still held at Series A.

[Ashish | The Founders' Stack @_AshishKulkarni]

The option pool is not the enemy.

Who pays for it is.

Pre money pool: you pay.
Post money pool: everyone pays.

One word in a term sheet. Several points of your company.

[Ashish | The Founders' Stack @_AshishKulkarni]

Most founders who refuse to raise aren't being disciplined.

They're scared of having someone above them.

That's a control fear wearing a finance costume.

[Ashish | The Founders' Stack @_AshishKulkarni]

Owning 100% of something worth nothing is not a flex.

[Ashish | The Founders' Stack @_AshishKulkarni]

Your share count doesn't drop when you raise.

New shares get created. Your percentage falls, your number of shares stays exactly the same.

Nobody tells you this on day one.

[Ashish | The Founders' Stack @_AshishKulkarni]

Dilution doesn't mean losing your company. It means owning a smaller slice of a bigger one.

Founders panic about the percentage. They skip the only question that matters: did the money buy more than it cost?

[Ashish | The Founders' Stack @_AshishKulkarni]

The same wire that gives you obsession is the one that breaks you when things go sideways. It’s not a bug. It’s the same wire.