<ul><li>As soon as a VC invests, the follow calculation begins: Can the company grow fast enough, and accomplish enough, before running out of money, to raise the Next Round at >=2x the price just paid.</li><li>There is a certain amount of runway, a period of time that money lasts, and a “Zero Cash Date.” Knowing and sharing this date is crucial.</li><li>If the criteria for raising the next round at a higher valuation may not be met, stress builds up for the startup and investors.</li><li>Venture capital can be great for startups, but it is expensive capital, especially in the early days.</li></ul>

Dear SaaStr: What Happens When a VC Fund Invests in a Startup?

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