For the opRmisRc….. There’s no CRUNCH It’s just easier to raise seed & harder to raise later rounds
Inside scoop on Venture Capital
80% of returns from VC come from 5% of funds
VENTURE MATH 101 Fund Size $100M Life of fund 10 years Return promised to LPs 20% Return needed $300M Average ownership in companies 15% Aggregate Exits needed $2B It’s crazy hard to make $ in VC! See: StartupCFO’s blog
VCs need businesses that can be HUGE
“Not every business Is fundable at every moment in Rme” Don’t Blame the System David Crow’s blog
2-‐ The BAD… 10M is the new 10 M users hXp://cdixon.org/2012/08/03/ten-‐million-‐is-‐the-‐new-‐one-‐million/
Metrics ValidaRon Team Great business/ Model
VCs trust metrics
Show operaEonally you are metrics driven Know your #’s by heart !
Demonstrate growth of key metrics Time is your enemy
VCs love LARGE in magnitude 1000’s….Million…. 10’s of million !
Risk miEgaEon & solid business model
The GOOD ! GeUng a deal done
GREAT businesses get funded.
GeUng a Deal DoneWhat VC’s look for? The 3 T’s -‐ Team, TracPon, Technology Familiar market – do your homework ! Sustainable business model Great co-‐investor syndicate
GeUng a Deal Done The 3 T’s -‐ Team: Strong domain knowledge Great track record Addressable holes in the team (if any) “Awesome” Team
GeUng a Deal Done The 3 T’s -‐ TracPon: TracPon shows there’s a market TracPon shows team can execute 3 forms of tracPon: -‐ Sales, audience, partners TracPon is validaPon
GeUng a Deal Done Tech/ CompePPve Advantage: • Why are you beXer ? • What do you have that they don’t? • Is there a barrier to entry?
GeUng a Deal Done VCs invest in familiar markets Do your homework Know the partner’s backgrounds Know all their investments Show there’s a ﬁt ? Due diligence goes BOTH ways !
3 things to take home 1. It’s F@#$ hard to raise money 2. Great businesses get funded 3. Team, tracPon, execuPon Good VCs are already tracking your progress