♞ Using Roll Up Vehicles

Using Roll Up Vehicles

Recently, I wrote about how accepting small checks can greatly improve your fundraising efforts. In response many of you wrote back with questions about the impact on your cap table of having so many investors at an early stage.

This is a perfectly valid concern, and it is true that having many investors on your cap table can make it more difficult to raise in future and increase the need for you to dedicate time and effort to investor relations over growth.

Today I wanted to present a possible partial solution: Roll Up Vehicles

A Roll Up Vehicle (RUV) is a financial tool designed to streamline the investment process for startups by pooling multiple investments into a single entity. This means you add just one entry on its cap table for several investor.

Why Consider an RUV?

1. Reduced Administrative Burden: Raising capital involves considerable paperwork and coordination. An RUV simplifies this by centralizing the process, allowing founders to focus on their business rather than on administrative tasks.

2. Enhanced Credibility: Presenting your fundraising efforts within the structure of an RUV adds professionalism and seriousness to your pitch. It tells potential investors that others have committed, thereby encouraging quicker and more confident investments.

3. Smoother Investor Relations Post-Investment: After initial funding, an RUV continues to offer benefits. It simplifies investor consent for future rounds and keeps your cap table cleaner, which is appealing to future investors. The RUV structure can also provide flexibility in negotiations if initial fundraising plans don't proceed as expected.

Are you looking to grow your business? Here is how I can help:

📢 Promote your startup to 2,000+ VCs including investors from a16z, YC, Techstars, Rarebreed, Sequoia and more.

📱 Book a Strategy Call to get 1:1 feedback on your pitch, pitch deck and/or fundraising strategy. (If you need general startup advice, then reply to this email, and I’ll let you know if/how I can help.)

📺 Access FundraiseOS, the ultimate fundraising course with video lessons and practical worksheets helping with everything from deciding how much to raise to understanding a term sheet.

💸 Promote your product or service to 100,000+ entrepreneurs.

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Onwards and Upwards,

Liam Gill