Eureka! I have an
idea… now what?
Funding strategies for early stage
startups
Cristiano B. M. Oliveira
Collide Center, 03/...
A little about myself…
Technology Entrepreneur!
Active on the startup community as
founder, executive, advisor, investor!
...
Disclaimer
Each investor has a
different perspective of the
world, so take this
presentation as a reference
and not an uni...
Defining the topic
Funding strategies for early stage startups
What is a startup? An organization
formed to search for a r...
Stage/
Attributes
Maturity Funding Risk
Early
No/Low
Revenues
Product &
Marketing
Way Higher
Growth
Revenues but
no/low pr...
Defining the topic
Funding strategies for early stage startups
Bootstrapping
(your time/
savings)
Family,
Friends &
Fools
...
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 ...
Rule #2: an industry
metric improved by 10x
Example: Apple, Music Player
10x more songs than
any MP3 player at that time
b...
Rule #3: initial market
proof and traction
Example: AirBnB, Hospitality Marketplace
users on temporary housing!
site couch...
Rule #4: recurrent,
simple revenue model
Example: Duolingo, Free Language Learning
Monetization = content translation = me...
Rule #5: team members
fit and track record
Example: LinkedIn, Professional Social Network
Successful track record in start...
Final thoughts
1. “A talented team (5) delivering substancial value
(2) in an emerging market (1), with an initial
proof/t...
Keep in touch!
!
http://about.me/cbmo
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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.

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

  1. 1. Eureka! I have an idea… now what? Funding strategies for early stage startups Cristiano B. M. Oliveira Collide Center, 03/18/14
  2. 2. 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 :-))
  3. 3. Disclaimer Each investor has a different perspective of the world, so take this presentation as a reference and not an universal truth
  4. 4. 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)
  5. 5. 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
  6. 6. 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
  7. 7. Got it… but now what do I need to raise money from investors for my new venture?
  8. 8. When on both sides of the table, raising or investing, I apply the following rule of five
  9. 9. Rule #1: a hyper growth, billion dollar market Example: Square, Mobile Payments Value to be! captured Future Valuation
  10. 10. 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
  11. 11. 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 ;-)
  12. 12. 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
  13. 13. 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)
  14. 14. 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
  15. 15. 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.
  16. 16. Keep in touch! ! http://about.me/cbmo

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