thinking about raising capital Big Rich Lifestyle Autonomy Vision what are your goals
do I want outside capital ? time consuming pros cons move quicker think bigger strategic freedom build a team access smarts loss of control failure rate alignment issues forces a big outcome
how much do I need ? stage amount key milestones startup $0-50K prototype, wireframe & customer development seed < $500K launch of beta product & early traction Series A $1.5M + growth in user base, build team, start revenue Series B $5M + serious growth, commercialization
fund raising checklist pro formas investor pitch executive summary
fund raising checklist The pro forma typically includes: core financials assumptions hiring plan department plans capital expenditure plan bonus... per user economics break-even point key metrics test different assumptions involve key people play w. revenue scenarios
fund raising checklist The investor pitch & executive summary About your company Team Problem Market (size, landscape, competition) Your Solution Business Model Go-to-Market Forecast Use of Proceeds Summary tell a story about the problem you solve.
what you must know Business - what makes you unique? Industry - key motivation for buying your stuff Numbers - metrics, financials, cash burn Comparables - competition, relevant exits Strengths & Weaknesses - don’t hide them! Strategy - how will you build a big, valuable business? Audience - why are you pitching me? Needs - how much money until exit?
what you must have Traction… Users Usage Metrics Feedback
sample timeline prep your investor package & make your hit list practice, practice, practice parallel, not serial send out your teaser book meetings t-minus 2 - 4 weeks t-minus 1 week Launch
sample timeline 1st meetings, feeling-out process 2nd meetings, in person with more than 1 partner early diligence weeks 2 & 3 weeks 4 & 5 weeks 6-8
sample timeline ALL PARTNERS MEETING term sheet docs & closing week 9 week 10 weeks 11-15 sleep! week 16
angels & VCs Strained relationship Same end goal: returns Need different approaches for each Very different needs & objectives Angel - time to break-even, year 1 burn, capital efficiency VC - opportunity size, team Priorities
fundraising tips strategic what to expect be prepared time fundraising to buzz go local first you will be rejected (a lot) smaller amounts 6 months + (VC)
fundraising tips play the game in your corner love @ 1 st sight go for the “no” create urgency advisors no agents angels are your friends