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Eureka! I have an idea... Now what? | Funding strategies for early stage startups
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Eureka! I have an idea... Now what? | Funding strategies for early stage startups

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My presentation at The Collide Center in McKinney, where I introduce my "rule of five" to measure the readiness of early stage startups for raising money.

My presentation at The Collide Center in McKinney, where I introduce my "rule of five" to measure the readiness of early stage startups for raising money.

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  • cbmo,
    IDEA is ready, DREAMTEKIS is ready, action plan is ready, market is ready....await UNDERSTANDABLE & HAND HOLDING VC.
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    Krishna Burli
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Eureka! I have an idea... Now what? | Funding strategies for early stage startups Eureka! I have an idea... Now what? | Funding strategies for early stage startups Presentation Transcript

  • Eureka! I have an idea… now what? Funding strategies for early stage startups Cristiano B. M. Oliveira Collide Center, 03/18/14
  • A little about myself… Technology Entrepreneur! Active on the startup community as founder, executive, advisor, investor! Former Founder/CTO at Spring Wireless (Enterprise Mobile/SaaS Applications), $100M in annual sales, successful exit! B.S., M.S. in Engineering, Universidade de São Paulo (Brazil); Executive Programs, Singularity University (USA), FGV (Brazil)! Share my time between Texas (family), California (work) and Alaska (fun :-))
  • Disclaimer Each investor has a different perspective of the world, so take this presentation as a reference and not an universal truth
  • Defining the topic Funding strategies for early stage startups What is a startup? An organization formed to search for a repeatable and scalable business model. (Steve Blank)
  • Stage/ Attributes Maturity Funding Risk Early No/Low Revenues Product & Marketing Way Higher Growth Revenues but no/low profit Working Capital Medium Late Revenues and profits Expansion/ IPO Lower Defining the topic Funding strategies for early stage startups
  • Defining the topic Funding strategies for early stage startups Bootstrapping (your time/ savings) Family, Friends & Fools Government/ Corporate Grants Crowd funding Paying Customers Venture Capital
  • Got it… but now what do I need to raise money from investors for my new venture?
  • When on both sides of the table, raising or investing, I apply the following rule of five
  • Rule #1: a hyper growth, billion dollar market Example: Square, Mobile Payments Value to be! captured Future Valuation
  • Rule #2: an industry metric improved by 10x Example: SpaceX, Space Exploration 10x cheaper to take 1lb to Low Earth Orbit on SpaceX Falcon = strong value proposition/creation
  • Rule #2: an industry metric improved by 10x Example: Apple, Music Player 10x more songs than any MP3 player at that time bo n u s slid e ;-)
  • Rule #3: initial market proof and traction Example: AirBnB, Hospitality Marketplace users on temporary housing! site couchsurfing,com temporary housing listings on SF &! NYC Craigslist from 07/09 - 07/16 It is way easier, but you don’t necessarily need data from your own product to prove a point
  • Rule #4: recurrent, simple revenue model Example: Duolingo, Free Language Learning Monetization = content translation = members practice on crowdsourced translations to companies that pay Duolingo (CNN, BuzzFeed)
  • Rule #5: team members fit and track record Example: LinkedIn, Professional Social Network Successful track record in startups Assure operations could run to scale Experience in the social space Deep technology capabilities Understanding of product-market fit Deep technology capabilities Strong analytical skills Tech team from engineering powerhouses
  • Final thoughts 1. “A talented team (5) delivering substancial value (2) in an emerging market (1), with an initial proof/traction (3) and monetization model (4)” 2. Modern startups are now engineered, so early stage investors have moved from gut feeling to a metric, fact-based approach. 3. Other topics outside my “rule of five”: company roadmap, competition/defensibility, financial projections, deal terms, who else is investing.
  • Keep in touch! ! http://about.me/cbmo