Startup Fundraising 101

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How does fundraising works for Startups at seed stage in Iran?

How does fundraising works for Startups at seed stage in Iran?

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  • Not sure why you wouldn't ask for an NDA from your investor(s), slide 14...if they choose not to invest, they could put your put your project at risk and you have no recourse.
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  • 1. All Rights Reserved - IEA 2013 FundRaising  101 @malayeri Tuesday, May 6, 14
  • 2. All Rights Reserved - IEA 2013 Resource Check  out  www.karya.ir  for  more  on   fundraising  in  Farsi Venture  Deals Great  Book  by  Brad  Feld  and  Jason   Mendelson Tuesday, May 6, 14
  • 3. All Rights Reserved - IEA 2013 Players •  Entrepreneur •  Venture  Capital •  Angel  Investor •  The  Lawyer •  The  Mentor Tuesday, May 6, 14
  • 4. All Rights Reserved - IEA 2013 Stages •  Seed  Stage •  Early  Stage ✴  Series  A ✴  Series  B •  Mid  Stage ✴  Series  C ✴  Series  D •  Late  Stage ✴  Series  E ✴  Series  F •  EXIT  (IPO  -­‐  M&A) Tuesday, May 6, 14
  • 5. All Rights Reserved - IEA 2013 Team  ... Tuesday, May 6, 14
  • 6. All Rights Reserved - IEA 2013 Team  ... They  invest  in  teams  not  ideas! It  is  all  about  your  team  ... Vision  +  Commitment  (NOT  INVOLVEMENT) Where  to  find  your  ideal  team? School?  MBA?  StartupWeekend? Create  your  Minimum  Viable  Team  (MVT) Tuesday, May 6, 14
  • 7. All Rights Reserved - IEA 2013 Size  Ma7ers! Tuesday, May 6, 14
  • 8. All Rights Reserved - IEA 2013 Size  Ma7ers! How  many  members? 1:  Slow  -­‐  Lonely 2:  Magic!  1  builds,  1  sells 3:  great  customer  development  team 4:  Crazy! 5:  WHAT??! Investors  care  about  your  background Tuesday, May 6, 14
  • 9. All Rights Reserved - IEA 2013 What  else? Tuesday, May 6, 14
  • 10. All Rights Reserved - IEA 2013 What  else? They  want  to  know  about  your  advisors You  need: MENTORS COACHES ADVISORS GOD  FATHERS FRIENDS NETWORK CUSTOMERS Tuesday, May 6, 14
  • 11. All Rights Reserved - IEA 2013 Types  ... Tuesday, May 6, 14
  • 12. All Rights Reserved - IEA 2013 Types  ... Smart  Money  vs.  Dumb  Money  (Hands-­‐off  Investors) Types  of  Investors: •  FFF:  Family,  Friend,  Fool •  Angels:  Usually  successful  entrepreneurs  who  are   inves]ng  their  own  money  from  the  industry  they  profited   from  to  startups  as  seed  inves]ng. •  VC:  Venture  capital  is  the  funding  resul]ng  from   professional  managers  inves]ng  other  people’s  money  in   startups  and  early-­‐stage  companies  in  order  to  generate   high  rates  of  return. Tuesday, May 6, 14
  • 13. All Rights Reserved - IEA 2013 Angel  vs.  VC Tuesday, May 6, 14
  • 14. All Rights Reserved - IEA 2013 Angel  vs.  VC Angel VC Less  Money More  Money For  Fun For  Profit Quick Slow  (~12months) No  Control Lots  of  Control Don’t  ask  for  NDA  from  your  investor Tuesday, May 6, 14
  • 15. All Rights Reserved - IEA 2013 Fundraising  Material Tuesday, May 6, 14
  • 16. All Rights Reserved - IEA 2013 Fundraising  Material •  ExecuLve  Summary   •PresentaLon  Deck •  Demo  /  Prototype  (More  important  than  BizPlan) •  Business  Plan  (Trend  is  changing  but  s]ll  valuable) •  Financial  Model  (The  earlier  stage  the  startup,  the  less   accurate  any  predic]on)  (Revenue  Forecast,  Monthly  Burn  Rate) •  Due  Diligence  Materials Tuesday, May 6, 14
  • 17. All Rights Reserved - IEA 2013 Investor  Pitch  ... Tuesday, May 6, 14
  • 18. All Rights Reserved - IEA 2013 Investor  Pitch  ... Tell  Your  Story Momentum  -­‐  Vision  -­‐  Team Gain  trust  in  your  team  -­‐  product  -­‐  market Don’t  over  sell  (or  sell  too  hard) Tuesday, May 6, 14
  • 19. All Rights Reserved - IEA 2013 There are only a few key things most VCs look at to understand and get excited about a deal: • the problem you are solving, • the size of the opportunity, • the strength of the team, • the level of competition or competitive advantage that you have, • your plan of attack, • and current status. Tuesday, May 6, 14
  • 20. All Rights Reserved - IEA 2013 Pitch  Deck... Tuesday, May 6, 14
  • 21. All Rights Reserved - IEA 2013 Pitch  Deck... Elevator  Pitch Problem Solu]on Market  Size Business  Model Compe]]on Go-­‐to-­‐Market  Strategy Team  /  Hire Money  /  Milestone Tuesday, May 6, 14
  • 22. All Rights Reserved - IEA 2013 Tuesday, May 6, 14
  • 23. All Rights Reserved - IEA 2013 ValuaLon  ... Tuesday, May 6, 14
  • 24. All Rights Reserved - IEA 2013 ValuaLon  ... Investment  is  about  how  much  you  need Startup  valuaLon  is  an  art You  need  validated  business  model  with  trac]on  not   Business  Plan Post  Money  VS.  Pre  Money  Valua]on Tuesday, May 6, 14
  • 25. All Rights Reserved - IEA 2013 create a dog race to increase valuation Tuesday, May 6, 14
  • 26. All Rights Reserved - IEA 2013 Note! •  It  is  a  long  term  process!  Be  Pa]ent   specially  if  dealing  with  VC •  Get  ready  for  at  least  5  years  of   commitment! Tuesday, May 6, 14
  • 27. All Rights Reserved - IEA 2013 Simple  Terms  in  Terms   Sheets •  Control  Terms ✴  Board  of  Director •  Other  Terms ✴  Dividends ✴  First  Right  of  Refusal ✴Employee  Op]on  ISOP Tuesday, May 6, 14
  • 28. All Rights Reserved - IEA 2013 Simple  Terms  in  Terms   Sheets •  Economic  Terms ✴  Price  (Valua]on  -­‐  Post   Money,  Pre  Money) ✴  Ves]ng ✴  An]-­‐Dilu]on •  Control  Terms ✴  Board  of  Director •  Other  Terms ✴  Dividends ✴  First  Right  of  Refusal ✴Employee  Op]on  ISOP Tuesday, May 6, 14
  • 29. All Rights Reserved - IEA 2013 QuesLons? Tuesday, May 6, 14