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- Venture funding operates in gears, with startups taking just enough money to reach the next stage.
- Conflicts with investors can be more problematic for startups than dealing with competitors.
- The five main sources of startup funding are friends/family, consulting, angel investors, seed firms, and venture capital funds.
- Friends and family funding is accessible but mixes business with personal life and may involve non-accredited investors.
- Consulting can fund a startup but carries risks of distraction and lower returns compared to product-focused startups.
- Angel investors provide early funding and valuable advice, but their deals vary widely and may lack protections.
- Seed firms offer standardized early-stage investments with a focus on founders rather than ideas.
- Venture capital firms invest large sums later on, with tougher terms like vesting and board control.
- Startups should approach VCs with personal introductions and when they can convincingly demonstrate potential.
- Deals often fall through due to buyer's remorse and the risky nature of startups; persistence is key.
- Key strategies include spending little, working fast, and maintaining leverage through competition in negotiations.