Skills that founders need
Practical guides for startup founders, written by the partners at 1984vc. All source documents are in references/.
Use this skill when a founder asks about fundraising mechanics, cap table math, co-founder dynamics, M&A exits, engineering practices, or tax strategy.
The mathematical foundations of cap table ownership. Covers how new shares dilute existing holders, price-per-share calculation, priced rounds vs SAFEs, and how to model your ownership through multiple financing rounds. Essential reading before any fundraise negotiation.
Live cap table calculations via the MCP at https://startup-finance.1984.vc/mcp. Use when a founder wants to model a real scenario — handles SAFEs, priced rounds, and options pool top-ups. Includes a worked example with two co-founders, YC, and a seed investor.
Strategy for finding startup ideas in the AI era. Argues against chasing large obvious markets; instead advocates for niche or offline industries where AI creates outsized leverage. Includes concrete portfolio examples.
Why co-founder selection is one of the highest-leverage decisions a founder makes. Covers the most common mistakes, where to find co-founders, how to evaluate fit, and how to structure vesting agreements before committing.
A practical guide to handling co-founder separations without destroying the company. Covers the three root causes of founder conflict, the five steps of a clean transition, and how to reach a separation agreement that protects the business.
How a departing founder's equity is treated differently depending on whether the seed round was a priced round vs. a SAFE. Includes worked cap table examples showing how forfeited shares redistribute to remaining holders.
Tactics for reducing Series A dilution beyond just executing well. Focuses on generating a second term sheet (BATNA) as the single most effective negotiating lever, with guidance on how to create competition without burning bridges.
The history and mechanics of SAFE instruments from YC's 2013 original to the 2018 post-money revision. Explains why SAFEs replaced convertible notes, the two key terms (cap and discount), and what rights SAFE holders have before conversion.
The critical difference between pre-money and post-money SAFEs when multiple rounds are stacked. Shows with worked examples how post-money SAFEs give investors a fixed ownership regardless of round size, while pre-money SAFEs dilute differently across rounds.
When to use a SAFE versus a priced equity round. SAFEs are simpler, more flexible, and preserve founder control; priced rounds are appropriate when investors require a board seat or when raising a large seed. Covers trade-offs for both sides.
What investors typically request in SAFE side letters and which terms are reasonable vs. problematic. Covers pro-rata rights (recommended formula language), MFN clauses (levels of complexity and risk), and information rights. Includes recommended standard language.
Slide-by-slide guidance for building a Series A pitch deck. Key principles: one message per slide, 15 slides max, story-first structure. Covers what investors look for at each section and links to a sample deck template.
Mechanics of how a Series A round reshapes the cap table. Covers option pool top-up (why it comes from founders, not investors), pro-rata rights exercise by seed investors, and the math behind typical Series A ownership targets.
How and when founders can sell personal shares to investors. Explains the mechanics (no dilution to other shareholders), when it's appropriate (typically Series C+, sometimes Series B for top performers), how to find buyers, and the board consent process.
What to do when a company can't raise at its last valuation. Explains structured rounds (dirty terms like superior liquidation preferences, guaranteed returns) vs. clean down rounds. Argues that down rounds are almost always better for founders and existing shareholders than structure.
Non-negotiable engineering discipline for seed-stage companies. The core argument: testing is a competitive advantage, not a luxury. Covers critical-path tests, regression tests, and integration tests as the foundation that lets engineers move fast post-Series A without rewriting everything.
How open source startups can drive discovery through content. Based on PostHog's playbook: "alternatives to X" articles, search-optimized content targeting engineers at decision points, and building a content engine that compounds over time. Practical and immediately actionable.
The case for privacy-respecting telemetry in open source projects. Argues that without usage data, maintainers build in the dark. Covers how to collect meaningful metrics (feature usage, error rates, performance) without betraying user trust, and how to communicate the policy to the community.
A step-by-step guide to running an M&A process. Covers when to hire a banker vs. go direct, how to build a buyer pipeline, managing parallel conversations, negotiation tactics, and how to handle exclusivity and LOI stages. Emphasizes that companies are bought not sold — but preparation matters.
The legal preparation required before entering an M&A process: engaging counsel, conducting sell-side due diligence, cleaning up cap table and corporate records, IP assignments, and employment matters. Aimed at founders who have never been through a sale before.
The three ways to structure an acquisition — asset purchase, stock purchase, and merger — with plain-language explanations of what each means for the buyer and seller. Covers the commercial and tax trade-offs of each structure and when each is typically used.
The key provisions in an acquisition agreement: consideration, purchase price adjustments, earnouts, escrow, governance, representations and warranties, closing conditions, and indemnification. Distinguishes commercial terms (founder's job) from legal terms (counsel's job).
How Qualified Small Business Stock (Section 1202) lets founders exclude up to $15M in gains from federal capital gains taxes. Updated for the July 2025 One Big Beautiful Bill Act which increased the exclusion cap and reduced the holding period. Covers eligibility requirements, state treatment, and planning considerations.