Startup Cfo   Bdo Term Sheet Event 051109
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Startup Cfo Bdo Term Sheet Event 051109

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A presentation on getting to the term sheet. Gave it at an event hosted by BDO.

A presentation on getting to the term sheet. Gave it at an event hosted by BDO.

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Startup Cfo Bdo Term Sheet Event 051109 Presentation Transcript

  • 1. Nov. 5, 2009 Perspectives on the Term Sheet www.startupcfo.ca
  • 2. THE GOOD OLD DAYS (?)… Copyright © 2009 – StartupCFO Enterprises Inc.
  • 3. NOW Copyright © 2009 – StartupCFO Enterprises Inc.
  • 4. THE PATH TO A TERM SHEET Copyright © 2009 – StartupCFO Enterprises Inc. Image: http://www.flickr.com/photos/philwirks/2219686874/
  • 5. The Process Copyright © 2009 – StartupCFO Enterprises Inc. New Deal Received Deal Team Formed (Sponsor + 1) Interesting + Fit? Deal Memo to Partners Company Presents to Partners Questions Raised Due Diligence Company Meetings + Term Sheet Investment Memo Investment Decision Legals & Cash Out NO: feedback to company + deal tracking YES Interesting YES NO: feedback to company + deal tracking NO: feedback to company + deal tracking YES YES
  • 6. The Process (Cont.)
    • Know your
      • Business – what makes you unique?
      • Industry – key factors, motivations 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 quickly?
      • Audience – why are you pitching me?
      • Needs – how much money till exit?
    Copyright © 2009 – StartupCFO Enterprises Inc.
  • 7. The Process (cont.)
    • A sample timeline:
    • Weeks -4,- 2: Prep your deck, exec summ, pro formas. Assemble your hit list
    • Week -1: Practice
    • Week 1: Launch your attack – parallel, not serial. Send out your teaser. Book 1 st meetings.
    • Week 2, 3: 1 st meetings
    • Week 4, 5: 2 nd meetings – in person. > 1 partner
    • Weeks 6 – 8: Early diligence
    • Week 9: ALL PARTNERS MEETING
    • Week 10: Term sheet
    • Weeks 11 – 15: Docs & closing
    • Week 16: Sleep!
    Copyright © 2009 – StartupCFO Enterprises Inc.
  • 8. Fundraising tips & truisms
    • Love at 1 st sight
    • Go for the “no”
    • Local first
    • Be prepared!
    • Time is not on your side - Create urgency
    • Time around something that generates momentum / buzz
    • Get good advisors
    • You will be rejected – a lot!
    • 6 months – maybe more these days
    • Know who you’re pitching and why
    Copyright © 2009 – StartupCFO Enterprises Inc.
  • 9. Fundraising today…
    • Takes longer
    • Flat is the new up. Down is the new flat
    • VC alphabet: B level traction to raise an A round
    • Smaller amounts
    • Angels are your friend
    • Get to revenue faster
    • Funding landscape (in Quebec) will be changing next year
    Copyright © 2009 – StartupCFO Enterprises Inc.
  • 10. Where fundraising derails…
    • Opportunity size
    • No competition
    • Don’t know the game
    • Valuation
    Copyright © 2008 - Mark MacLeod
  • 11. Term sheets that suck
    • Too complex
    • Premature
    • Incomplete or orphans
    • The babysitter
    Copyright © 2009 – StartupCFO Enterprises Inc.