How to Field Dress a Venture Capitalist
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How to Field Dress a Venture Capitalist

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The "inner workings" of VCs, angel investors and friends and family investors while fundraising for a startup.

The "inner workings" of VCs, angel investors and friends and family investors while fundraising for a startup.

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How to Field Dress a Venture Capitalist How to Field Dress a Venture Capitalist Presentation Transcript

  • “HOW TO ‘Field Dress’ a Venture Capitalist” “Field dressing is the process of removing the internal organs of hunted game, and is a necessary step in preserving meat from animals harvested in the wild.” Source: http://en.wikipedia.org/wiki/Field_dressing_(hunting) “How to ‘Field Dress’ a Venture Capitalist” ©2013 Tech Coast Angels
  • DISCLAIMER: No Venture Capitalists (VCs) were injured in the creation of this presentation. Any resemblance of the “patient” displayed to any current, or past venture capitalist, is purely coincidental.“How to ‘Field Dress’ a Venture Capitalist” ©2013 Tech Coast Angels
  • Your “Entrepreneurial Hunt” for funding isdone. You’ve “bagged” your venturecapitalist.What can proper “field dressing” of your VCtell you about the future entrepreneur/VCrelationship? Let’s examine the steps… “How to ‘Field Dress’ a Venture Capitalist” ©2013 Tech Coast Angels
  • STEP ONE: “REMOVE THE HEART”“How to ‘Field Dress’ a Venture Capitalist” ©2013 Tech Coast Angels
  • DISCOVERED: “LIMITED HEARTS”  “VC Heart” is with “fiduciary responsibility” to their investors (limited partners).  “Love” of investment strictly based on company performance (potential return to investors).  Entrepreneurs are “replaceable”.“How to ‘Field Dress’ a Venture Capitalist” ©2013 Tech Coast Angels
  • LESSON:  VC investment an “engagement” not necessarily a “marriage”.  VC fiduciary responsibility overrides anything else.  Treat as business “relationship”, not personal “friendship”; no “love” here!“How to ‘Field Dress’ a Venture Capitalist” ©2013 Tech Coast Angels
  • STEP TWO: “REMOVE STOMACH”“How to ‘Field Dress’ a Venture Capitalist” ©2013 Tech Coast Angels
  • DISCOVERED: “WEAK STOMACHS”  CAN’T always stomach FAILURE.  CAN’T always stomach ADVERSITY.  WON’T stomach INCOMPETENCE.“How to ‘Field Dress’ a Venture Capitalist” ©2013 Tech Coast Angels
  • LESSON:  Set expectations early on.  Regular updates on business.  Agree on ongoing business measurement metrics.  Plan on a “bumpy road”, (again) set expectations accordingly“How to ‘Field Dress’ a Venture Capitalist” ©2013 Tech Coast Angels
  • STEP THREE: “REMOVE LUNGS”“How to ‘Field Dress’ a Venture Capitalist” ©2013 Tech Coast Angels
  • DISCOVERED: “LARGE LUNG CAPACITY”  Large supply of oxygen ($).  Can sustain business through “bumps”.  BUT: will expel lots of “Carbon- Dioxide” or “Company-Dilution” over time.“How to ‘Field Dress’ a Venture Capitalist” ©2013 Tech Coast Angels
  • LESSON:  Know your cash requirements.  If follow-on funding required: try to tie to business-related goals and bumps in company valuation.  Dilution is under your control.“How to ‘Field Dress’ a Venture Capitalist” ©2013 Tech Coast Angels
  • STEP FOUR: “REMOVE BRAIN”“How to ‘Field Dress’ a Venture Capitalist” ©2013 Tech Coast Angels
  • DISCOVERED: “VARIABLE BRAIN SIZE”  VCs: some CREATE TRENDS, some just follow.  Some have “walked the walk” of entrepreneurship; some just “talk the talk”.  Will they add value, or simply $ to your business?“How to ‘Field Dress’ a Venture Capitalist” ©2013 Tech Coast Angels
  • LESSON:  DO YOUR DUE DILIGENCE on perspective VCs.  Check their “grey matter” prior to relationship.  When problems inevitably surface with business: want a partner with some wisdom in your market.“How to ‘Field Dress’ a Venture Capitalist” ©2013 Tech Coast Angels
  • ULTIMATE LESSONAll lessons are applicable to venture capitalists, angelinvestors or even friends and family, from which you mayfundraise a startup investment.Know the “internal workings” or your investing sourceand maintain a relationship that works for bothentrepreneur and investor. “How to ‘Field Dress’ a Venture Capitalist” ©2013 Tech Coast Angels
  • Who are the Tech Coast Angels?Tech Coast Angels, www.techcoastangels.com, the largest angel investornetwork in the United States, provides funding and guidance to moreearly‐stage, high‐growth companies in Southern California than any otherinvestment group. Since its inception in 1997, TCA members have focused onbuilding valuable companies, personally invested more than $100M, andhelped portfolio companies attract more than $1B in additional capital, mostlyfrom venture capital firms.TCA members give companies more than just capital; they also providecounsel, mentoring and access to an extensive network of potential investors,customers, strategic partners and management talent.TCA has more than 300 members, including its venture capital affiliates, in fivenetworks in Los Angeles, Orange County, San Diego, Westlake/Santa Barbaraand the Inland Empire. “How to ‘Field Dress’ a Venture Capitalist” ©2013 Tech Coast Angels