Your SlideShare is downloading. ×
0
How to Source Your Investors
How to Source Your Investors
How to Source Your Investors
How to Source Your Investors
How to Source Your Investors
How to Source Your Investors
How to Source Your Investors
How to Source Your Investors
How to Source Your Investors
How to Source Your Investors
How to Source Your Investors
How to Source Your Investors
How to Source Your Investors
How to Source Your Investors
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

How to Source Your Investors

771

Published on

A roadmap for how to identify, attract the attention of, and diligence the right investors for your startup.

A roadmap for how to identify, attract the attention of, and diligence the right investors for your startup.

Published in: Business, Economy & Finance
1 Comment
1 Like
Statistics
Notes
No Downloads
Views
Total Views
771
On Slideshare
0
From Embeds
0
Number of Embeds
3
Actions
Shares
0
Downloads
11
Comments
1
Likes
1
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. 1 © 2013 SoftBank Capital October 2013 How to Source Your InvestorsHow to Source Your Investors Joe Medved, PartnerJoe Medved, Partner @joevc@joevc
  • 2. 2 © 2013 SoftBank Capital SoftBank CapitalSoftBank Capital #1 VC for Exits and Seeds with Follow-Ons in New York* *Over past 5 years per CB Insights Making early and growth stage investments in companies that connect people, devices and the world Recent Exit Highlights by by by by
  • 3. 3 © 2013 SoftBank Capital Picking Your Investors is Like Marriage*Picking Your Investors is Like Marriage* *Except there can be a unilateral divorce clause, and it’s not in the favor of entrepreneurs, so avoid a shotgun wedding
  • 4. 4 © 2013 SoftBank Capital How Much Do You Need?How Much Do You Need? [Insert small pile and large pile of money image, or scale with small and large]  Optimally you will raise enough cash for 12-18 months of runway  You’ll need to be out raising 3-6 months before your next round  “Raise as little as necessary!” / “Raise as much as you can!”  Raise enough to get you to the next value creation hurdles  If you’re raising at a high market price, raise for a longer runway  Target 20-30% max dilution on your first round. You’re likely getting 20% or more dilution every round.  Quality investors understand big companies are built with large teams that should retain a significant portion of equity.
  • 5. 5 © 2013 SoftBank Capital Typical ranges by type: Which Type of Investor?Which Type of Investor? Customers – Don’t raise! Friends & Family < $250K Traditional VCs $1M+ Seed Funds $250K-$2M Angels < $500K
  • 6. 6 © 2013 SoftBank Capital Where Do You NeedWhere Do You Need Help?Help? Consider the collective skillset of the individuals and funds that you would like to bring together for the round syndicate  Product, Technology, Recruiting, Sales, Business Development, Distribution, Manufacturing, Market Validation…
  • 7. 7 © 2013 SoftBank Capital Frequent Communication Batphone How Much Help Do You Want?How Much Help Do You Want? Consider the desired level of engagement from both sides.
  • 8. 8 © 2013 SoftBank Capital How Do You Get Their Attention?How Do You Get Their Attention?  Referral, referrals, referrals  Rise above their filters and inbox overload with mutual, trusted connections  Leverage their portfolio companies & your customers, partners or advisors  Networking  Meet them at conferences, community events, narrowly focused meetups, coworking spaces, alumni gatherings and office hours  Start your own events bringing together influencers to demonstrate your ability to connect with potential customers and partners Active investors see hundreds if not thousands of pitches annually.
  • 9. 9 © 2013 SoftBank Capital How Do You Get Their Attention?How Do You Get Their Attention?  Engage online – many investors are active bloggers and tweeters  Engage in conversation with them through their online presence, sharing links with info about your company and product  Build up your own social profile to demonstrate your influence and knowledge  New alternatives like AngelList, with its valuable investor data & access  Build your social proof with investor & advisor endorsements, or presales  Apply to an accelerator or similar startup program
  • 10. 10 © 2013 SoftBank Capital Hook Them With A Simple PitchHook Them With A Simple Pitch Best Practices  Share demos or mockups, plus KPI trends if you’ve launched  Hand wrap an email that a mutual contact can forward with this info plus a paragraph pitch  There’s less spam on Twitter and LinkedIn. Send an @message or connection request with a few words on your product/service and a link to learn more.  Give a brief pitch at a conference or meetup and ask if you can send additional info. Land a full meeting. Worst Practices  Put together a long, text heavy business plan that requires more than a few minutes of reading to get your value prop across  Cold call or email an investor through their general fund number or inbox  Deliver a message that just says you have an amazing business you would like to speak to them about  Walk up to a speaker at a very busy conference and give your full pitch.
  • 11. 11 © 2013 SoftBank Capital You’ve Got a Meeting, Now What?You’ve Got a Meeting, Now What?  Just like a sales pitch, go into your first meeting with in depth knowledge of the investor’s interests and needs  How do you fit within their investment thesis?  Who else do you know in their network that you can reference?  Have explicit reasons why they are a match as an investor  Post the meeting, send the pitch deck you just gave with a brief summary that can easily be forwarded to other decision makers  Make the ask  What is the next step in their process?  What other information can you provide?  When should you expect to hear back from them? If you don’t hear back, send a polite follow up to stay high on their priority list.
  • 12. 12 © 2013 SoftBank Capital Diligence, It’s For Entrepreneurs ToDiligence, It’s For Entrepreneurs To  References!!! Speak to entrepreneurs the investor has backed before, including those who have crushed it or been crushed  Is their healthy engagement with the investor? And their team?  Where can they help & what types of board members complement them?  Leverage their network for customer references  On top of your existing customer references, ask to pitch your business to potential customers in their network  Follow on investments  If they’ll follow on, how frequently do they?  How much would they reserve?  If you’re working with a fund, what is their capital health?  What percentage of their fund is invested and reserved?  If they are raising soon, is your individual lead in good standing? Never take money without running diligence on the investment partner and their firm when applicable
  • 13. 13 © 2013 SoftBank Capital What if None of This Works?What if None of This Works?  What are the proof points you were lacking?  Ask investors for specific reasons as to why they passed – team, market, product, stage, etc.?  Determine if you can bootstrap to get to those thresholds  Could you provide services for a customer that could help subsidize the growth of your product?  You need a scalable solution long term, but services work can get you there  If all else fails, can you join another startup in your area of interest to gain the experience required to build your own company long term?  The key to most early stage investments is the team  Make your own bet on a promising startup and help it grow to demonstrate the potential to run your own
  • 14. 14 © 2013 SoftBank Capital Joe Medved, PartnerJoe Medved, Partner www.joemedved.comwww.joemedved.com @joevc@joevc

×