Down rounds and defensive dilution: when raising capital means losing value

In a startup’s lifecycle, funding rounds are often seen as positive milestones. Each new investment provides resources for growth and, typically, a valuation higher than the previous one. However, in more demanding market conditions or when growth fails to meet expectations, what are known as down rounds can occur—that is, funding rounds carried out at […]

When not to raise investment: growing with your own resources is also a valid strategy

In the startup ecosystem, the idea has become widespread that raising investment is a natural and even necessary step for growth. Funding rounds are often interpreted as signs of success, and many companies plan their development around capital raising. However, not all business models require external investment, and in some cases, raising capital can introduce […]

What protects an investor’s rights and what protects the founder?

The rights in an investment round are not a legal whim, but an explicit allocation of risks. The investor seeks to protect capital and ensure influence in adverse scenarios. The founder, for their part, aims to preserve operational control, execution speed, and their long-term economic incentive. When both protections are aligned, the shareholders’ agreement reduces […]

Tag-along and drag-along rights: when they protect and when they constrain

In a seed round, drag-along and tag-along rights are usually signed almost by default, but their actual effect depends on how thresholds are defined, who can trigger them, and what happens with the details of the sale. Explained simply, the drag-along right forces minority shareholders to sell if a majority decides to do so, thus […]

Investor Report: the monthly format that builds trust without consuming time

A good monthly report is not an extensive document: it is a control tool. Its function is twofold. On one hand, it allows the investor to understand how the company is evolving without having to constantly ask for information. On the other, it forces the management team to maintain a minimum dashboard to make decisions […]