Navigating Your Fundraising Quadrants

Full transcript

Jason Kirby: Hey, team. Just want to give you a quick rundown of this episode. New office situation—gonna hopefully spice it up behind me eventually. This one will be running through a presentation with a screen share you can follow along with. When you’re doing the editing, I’ll give you this deck and you can use it however you want.

Jason Kirby: Decide when to focus on my face and go full screen on me versus highlighting the slide, and when to have me overlay the slide. Don’t make it a constant me-in-the-bottom-corner—spice it up a little. Feel free to chop out any uh’s, um’s, or pauses. Ideally, this is a 15–20 minute video—maybe a little longer depending on flow and detail. If I start rambling, cut it out. I’ll get started; happy to take feedback or comments.

Jason Kirby: Today, we’re talking about where you stand in the fundraising quadrants. Are you familiar with them? What are they, how do they impact you, and where are you as a founder trying to raise capital—debt or equity—given your quadrant? We’ll outline where you might land, the specific criteria for each quadrant, and the capital options available based on where you are.

Jason Kirby: Why am I qualified to talk about fundraising? I’ve built and sold multiple companies with four exits, including a technology company acquired by Walmart called Liquids Guy. I’ve raised over $145 million as a founder, operator, advisor, and investor. Now I help founders navigate capital options every day—identifying sources, how to access them, and introducing the right partners.

Jason Kirby: Let’s talk about how difficult it is to get fresh capital. Founders often think of venture as the first and primary option, but in reality there are many. We’ll cover how to source capital that’s right for you and your business.

Jason Kirby: Start with your North Star. It sounds cliché, but you don’t know how to get somewhere until you know where you want to go. I spend a lot of time with founders on what they actually want to achieve with the business. Let’s go over potential North Star options so you can identify where you fall.

Jason Kirby: Some founders aim to get acquired—anything from acqui-hire to big nine-figure exits, often by a strategic. Maybe it’s about being part of something bigger; of course money can be a reason too. Others want to generate free cash flow: you love the business, want profitability, and to pay yourself more.

Jason Kirby: Sometimes you want to go IPO—and that’s fine. Many venture firms back founders who want to go big, and IPO can be the only way to create liquidity when you become too large. Some founders are burned out and want to replace themselves but retain ownership—be an owner, not an operator. And some just want to survive: maybe you’re early, pre–product-market fit, and survival is the focus for now.

Jason Kirby: Lastly, lifestyle businesses: you want meaningful income—six or seven figures—without investor oversight or a board. You want the freedom to make choices that fit your life. Ask yourself which of these you align with; that dictates the capital you should pursue: venture, private equity, or debt. If you want to grow to IPO, PE may be impractical—venture is more likely. If you want a lifestyle business, steer clear of venture.

Jason Kirby: Now that you know where you want to go, where are you starting from? Enter the cashflow quadrants. This isn’t a perfect catch-all, but it gives a solid sense of position.

Jason Kirby: Early Growth: typically around or below $1M ARR, growing ~10% month over month with strong potential.

Jason Kirby: Established Growth: over $1M ARR, growing 10%+ month over month, with strong prospects of continued growth.

Jason Kirby: Strong but Slow: a real business with real revenue, but not rapid MoM growth—maybe 10–50% YoY. Great business, but it attracts a different type of capital than Early/Established Growth.

Jason Kirby: Struggling: options are more limited if you’re under $1M ARR or declining. Reflect on these quadrants and pick where you fit; we’ll use that to map capital options.

Jason Kirby: With your North Star and starting quadrant, which path makes sense? Early Growth often fits early-stage venture—pre-seed, seed, angels, or friends and family, typically under a couple million dollars.

Jason Kirby: Established Growth: you’ll have many options—this is where lots of capital wants in. Then it becomes about your North Star: which capital is appropriate, given the abundance of choice.

Jason Kirby: Strong but Slow: debt, private equity, or strategic M&A are often most applicable.

Jason Kirby: Struggling: optimize for acqui-hire or shift to profitability—reduce growth focus and generate cash flow. You might bring in a turnaround leader or organization.

Jason Kirby: Let’s go deeper into each path. Attracting venture—what does it take in Early or Established Growth?

Jason Kirby: Growth is crucial. There are two kinds: traction (you’ve built a growing business) and market growth (you’re entering a high-potential market even pre-product). Early-stage bets sometimes back the market and team before traction.

Jason Kirby: Be in a shiny market. Don’t get stuck in a legacy category. Pay attention to where dollars are flowing today—2025 has strong AI tailwinds, for example. If venture is the right path, position into a market investors are excited about.

Jason Kirby: Show traction and validation: working growth channels you can pour more capital into. Build a rockstar team—many VCs back teams as much as businesses. And learn to generate FOMO: build VC relationships ahead of time so when you run a process, multiple term sheets compress timelines and prevent tire-kicking.

Jason Kirby: Debt fits Established Growth or Strong but Slow. Lenders care about assets—enterprise value validated by investors, equipment, or IP that can be collateralized to protect downside. Unlike venture, debt hates losses.

Jason Kirby: Deep-pocketed investors help—equity backers are less likely to let a company fail, which lowers lender risk. Secured or recurring revenues are loved for predictability. Financial history matters; it’s hard to get debt brand-new. Big-name clients help too—AR financing lets lenders underwrite the client, not just you.

Jason Kirby: Inventory and equipment can be collateralized to unlock working capital. There are many debt types—AR factoring, term loans, lines, revenue-based financing, inventory financing, equipment leasing, venture debt, and more. Generally you need to be in Established Growth or Strong but Slow to have meaningful access.

Jason Kirby: Private equity: typically buying a majority, sometimes minority. It’s for stable, profitable businesses. Venture targets minority stakes for outsized enterprise value growth; PE targets lower return multiples but lower downside risk.

Jason Kirby: Expectation setting: many PE partners want a path to 3–5× in 3–5 years, via secondary sale, recap with debt, or strategic exit. Predictable revenue is key for underwriting. They prefer backing teams and assets that already work—less risk.

Jason Kirby: Think about instant value a PE partner can add: portfolio partnerships, cross-sell, cost efficiency, or making you an add-on acquisition to a larger platform. PE is often creative with deal structures—upfront cash, earn-outs, rollover equity, leverage—so talk to them; they may see paths you don’t.

Jason Kirby: Planning the exit or pursuing M&A: if you’re in Established Growth or Strong but Slow, consider strategic value. Aqua-hire value can be meaningful—engineers can add $1–2M to purchase price based on seniority. Product expansion, cross-sell to shared customers, and complementary IP all raise attractiveness.

Jason Kirby: Ask: what’s in it for the buyer? Profitability and EBITDA multiples matter, but strategic value often commands better outcomes. Consolidation plays are powerful—being the initial platform for roll-ups carries pre- and post-acquisition value.

Jason Kirby: Review the quadrants: Early Growth, Established Growth, Strong but Slow, and Struggling. Pick your quadrant, align on your North Star, and discuss options with advisors, your board, and investors.

Jason Kirby: The binary question to ask yourself: should you use other people’s money or stay bootstrapped? The quadrants and definitions here help you answer whether to stay heads-down or to seek capital.

Jason Kirby: About Thunder: we’re a tech-enabled investment bank for founders, by founders, helping founder-led organizations navigate capital strategy. Companies using our free tools have gone on to raise over $1.2B in transactions; we’ve been directly involved in over $200M in the last few years.

Jason Kirby: Our network of companies, funds, and investors enriches our data to surface relevant parties for your strategy. Use our free VC Finder and Debt Financing tools—they map these quadrants and route you toward the right capital. We also publish this podcast and a biweekly newsletter.

Jason Kirby: Our services cover debt, equity, and M&A strategy. Even if you have a preferred path, we can help you build the defensible strategy report to align your board and investors.

Jason Kirby: Join the community—subscribe at thunder.vc. Tell us about yourself and we’ll see how we can help you navigate capital options. Links and details are below; if you want the presentation, leave a comment and we’ll send it. Thanks for joining—don’t forget to like and subscribe.