Fundraising Series (Part One): Value Propositions

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Fundraising Series (Part One): Value Propositions

  1. 1. Arif Janmohamed Partner, Lightspeed Oct 9, 2013 arif@lsvp.com @arifj
  2. 2. Lightspeed at a Glance TODAY Lightspeed Confidential - Not to be copied, distributed or referred to without the prior written consent of Lightspeed Venture Partners 18 Investment professionals  140+ Active investments  $2.8B of committed capital  Investing out of $675M Fund IX Lead investment approach with board involvement  1990’s   Lightspeed is an early stage venture capital firm focused on innovations in the Enterprise and Consumer industries. For over two decades, Lightspeed Partners have backed and helped build more than 200 global companies, many of which have become market leaders. Deep expertise in enterprise technology, consumer, digital media 2
  3. 3. Background: Arif Janmohamed  My Background : • Joined Lightspeed in 2008, promoted to Partner in 2011 • Cisco Systems, Mergers & Acquisitions • Key transactions include WebEx ($3.3B), Securent ($100M), Postpath ($200M), Jabber and Latigent • •  Novitas Capital, an early-stage venture capital firm Sun Microsystems, Andes Networks (SUNW), WebTV (MSFT) My Education: • •  MBA from the Wharton School, University of Pennsylvania BSc in Computer Engineering from the University of Waterloo, Canada. My Focus Areas at Lightspeed: Infrastructure • Communications • Networking • @arifj • Software Lightspeed Confidential - Not to be copied, distributed or referred to without the prior written consent of Lightspeed Venture Partners 3
  4. 4. Two topics to cover today… Company Value Proposition what am I selling? Investor Value Proposition how to raise capital from venture capitalists Lightspeed Confidential - Not to be copied, distributed or referred to without the prior written consent of Lightspeed Venture Partners 4
  5. 5. Two topics to cover today… Company Value Proposition what am I selling? Investor Value Proposition how to raise capital from venture capitalists Lightspeed Confidential - Not to be copied, distributed or referred to without the prior written consent of Lightspeed Venture Partners 5
  6. 6. So what is a value proposition? Value Proposition inform a choice Lightspeed Confidential - Not to be copied, distributed or referred to without the prior written consent of Lightspeed Venture Partners 6
  7. 7. What matters? 5 things… purpose. audience. significance. category. uniqueness Lightspeed Confidential - Not to be copied, distributed or referred to without the prior written consent of Lightspeed Venture Partners 7
  8. 8. 5 things matter… what is it? Lightspeed Confidential - Not to be copied, distributed or referred to without the prior written consent of Lightspeed Venture Partners 8
  9. 9. 5 things matter… who cares? Lightspeed Confidential - Not to be copied, distributed or referred to without the prior written consent of Lightspeed Venture Partners 9
  10. 10. 5 things matter… key benefits. painkiller or vitamin? Lightspeed Confidential - Not to be copied, distributed or referred to without the prior written consent of Lightspeed Venture Partners 10
  11. 11. 5 things matter… competition. economics. Lightspeed Confidential - Not to be copied, distributed or referred to without the prior written consent of Lightspeed Venture Partners 11
  12. 12. 5 things matter… differentiation. substitutes. Lightspeed Confidential - Not to be copied, distributed or referred to without the prior written consent of Lightspeed Venture Partners 12
  13. 13. Two topics to cover today… Company Value Proposition what am I selling? Investor Value Proposition how to raise capital from venture capitalists Lightspeed Confidential - Not to be copied, distributed or referred to without the prior written consent of Lightspeed Venture Partners 13
  14. 14. What matters to investors… team. market. plan. Lightspeed Confidential - Not to be copied, distributed or referred to without the prior written consent of Lightspeed Venture Partners 14
  15. 15. What matters to investors? unfair advantage Lightspeed Confidential - Not to be copied, distributed or referred to without the prior written consent of Lightspeed Venture Partners 15
  16. 16. What matters to investors? large, rapidly growing Lightspeed Confidential - Not to be copied, distributed or referred to without the prior written consent of Lightspeed Venture Partners 16
  17. 17. What matters to investors? sustainable leverage Lightspeed Confidential - Not to be copied, distributed or referred to without the prior written consent of Lightspeed Venture Partners 17
  18. 18. Ok got it. Now what? goal is the second meeting Lightspeed Confidential - Not to be copied, distributed or referred to without the prior written consent of Lightspeed Venture Partners 18
  19. 19. I got the meeting! first 3 minutes matter who are you? why is your product important? unfair advantage? Lightspeed Confidential - Not to be copied, distributed or referred to without the prior written consent of Lightspeed Venture Partners 19
  20. 20. Why is Value Prop important? purpose. audience. significance. category. unique. Lightspeed Confidential - Not to be copied, distributed or referred to without the prior written consent of Lightspeed Venture Partners 20
  21. 21. Why is Value Prop important? simple. concise. investment thesis Lightspeed Confidential - Not to be copied, distributed or referred to without the prior written consent of Lightspeed Venture Partners 21
  22. 22. Takeaway The value proposition is ALL an investor needs to know about your business. So, make sure you concisely emphasize the points that make your business a compelling investment opportunity Lightspeed Confidential - Not to be copied, distributed or referred to without the prior written consent of Lightspeed Venture Partners 22
  23. 23. So how do I overcome the odds?? pipeline. iterate. feedback. Lightspeed Confidential - Not to be copied, distributed or referred to without the prior written consent of Lightspeed Venture Partners 31
  24. 24. Turn-offs – how to get to “No” • Asking an investor to sign an NDA • Talking about “exit strategy” at the early stage • Thinking too small • Asking for term sheet ahead of diligence • Focusing too much energy on valuation Lightspeed Confidential - Not to be copied, distributed or referred to without the prior written consent of Lightspeed Venture Partners 32
  25. 25. What next Q&A? ask me anything. just not for money now. Lightspeed Confidential - Not to be copied, distributed or referred to without the prior written consent of Lightspeed Venture Partners 33
  26. 26. Arif Janmohamed arif@lsvp.com @arifj

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