Preparing to seek funding

Slideshow Transcript

1. Slide 1: Preparing for Funding
2. Slide 2: The Fundraising Process Monk/ Nun No Banker Term Closing Matchmaker? Sheet Face Biological Bus Plan Imperative? Courtship Engage Wedding Road Show Yes Negotiation Date Key objectives: Or Flip the Deal Auction? • Minimize the courtship time • Maximizing value Prostitution • Get to the alter
3. Slide 3: Review – the Business Plan Proprietary Advantage  Massive Market  Large enough market to absorb multiple  rounds of investment Likely exit strategy  Management team to make it happen 
4. Slide 4: Courtship - Beyond a Business Plan Shore up your intellectual property  Get your elevator pitch down  Identify Sales & Marketing Experience  in the Relevant Market Clean up the equity portion of your  balance sheet Decide on whether to use an  intermediary to raise funding
5. Slide 5: Inventory the IP Freedom to Practice Ability to Exclude   Technology Others No Infringement Patents   No conflicting Trademarks   employment / License  agreements Distributorship  No sanctions  Franchise  Know-How  Customer Lock-up Have a qualified lawyer on  board.
6. Slide 6: The “Line” You have the passion or you wouldn’t have  gotten to this point Learn how to articulate it  Brevity  Verbally and written  Balance hype with professionalism  VC’s are salespeople  Hire a coach  Remember – the delivery of the pitch frames  the investor’s impression of your marketing skills
7. Slide 7: Sales, sales, sales! (it really isn’t about the technology) Revenue drives business today  Does team have proven performers?  Have they performed in targeted  market? Are sales to any significant customers in  process? How far along?
8. Slide 8: Equity – What’s in the closet? Minimize the enterprise baggage  NDA’s with former employees?  Unfulfilled promises?  Unexercised options or warrants?  Buy backs not funded?  Royalties granted?  Employment suits?  Compensation and benefits unpaid?  Loan covenants block the marriage 
9. Slide 9: Matchmaker, matchmaker? Love at first sight vs. playing the field  Advantages of using an intermediary  Closer to market  Sense of competition can be created  Opens more doors  Does premium created exceed the  transaction fee?
10. Slide 10: Courtship hasn’t changed The beauties get to engagement fast  Wardrobe and make-up counts  Nobody chases a wallflower very hard  Due diligence follows the first date  First impressions count but the lipstick comes off  the pig at this stage Communication is a glimpse of the marriage –  lasting relationships are built on mutual trust The real challenges come after the nuptials 
11. Slide 11: Next Steps For more information or to contact the  author: Andy Forbes a.forbes@earlystage.com