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David Nault What it Really Takes to Close Your Next Round
 

David Nault What it Really Takes to Close Your Next Round

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    David Nault What it Really Takes to Close Your Next Round David Nault What it Really Takes to Close Your Next Round Presentation Transcript

    • Series  “A”  Funding   David  Nault   @venturebuilder   david@iNovia.vc  
    • Agenda   1.  The  Good   2.  The  BAD     3.  The  UGLY   …of  raising  your  next  round.  
    • Agenda  v.2.0   1.  The  UGLY   Series  A  crunch   2.  The  BAD     New  criteria  for  series  A     3.  The  Good   Good  businesses  get  funded   …of  raising  your  next  round…  
    • Why  is  RAISING  MONEY     so     F@#%     HARD  !  
    • Increased  number  of    startups     $
    • 2012    400*   2011    280   2010    220   Canadian  seed  deals  Seed  =  <$1.5M  *  esPmated  
    • 20%  will  successfully  raise  series  A  
    • Data  shows:  Series  A  Crunch  
    • 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  
    • David  Nault  @venturebuilder  david@inovia.vc