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Fundraising Essentials

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Fundraising Essentials

  1. 1. © 2020, Amazon Web Services, Inc. or its affiliates. All rights reserved. Fundraising Essentials YAU, Roland Managing Partner, CoCoon Ignite Ventures CHAN, Sze Lok Sr. Startup Business Development Manager, AWS
  2. 2. About Cocoon Ignite Ventures Consumer Robotics Data Analytics Enterprise
  3. 3. The Secret Generate authentic competition for your round, giving investors FOMO (fear of missing out) and a sense of urgency
  4. 4. What We’ll Cover 5 Tips for Raising a Seed Round How did the pandemic change the way to raise a round Tips for raising fund in post-pandemic Summary
  5. 5. © 2020, Amazon Web Services, Inc. or its affiliates. All rights reserved.
  6. 6. Tip #1: You’re either in full fundraising mode or you’re not
  7. 7. Tip #2: Fundraise in parallel (not in sequence) and put yourself in a position to say “no”
  8. 8. 3:1
  9. 9. Tip #3: Don’t try to manufacture investor urgency with made up close dates
  10. 10. To Fundraise or Not To Fundraise ● Clear reason to fundraise ● Clear objective for raised proceeds ● Took advantage of the overall situation: ○ Need for entertainment / reskilling ○ Need for human-less service ● Not just fundraising, but looking for like-minded partners ● No need to fundraise as existing revenues is sufficient to sustain business ● Clear forecast on when the next fundraising window would be ● Will only go into full-time fundraising mode when overall business is in a much more attractive state
  11. 11. Tip #4: A Good Fundraising Narrative
  12. 12. What is a fundraising narrative? A concise explanation of what you do, what’s most compelling about your business, why you’re raising money, and your long-term vision.
  13. 13. A good narrative can do the following in 20 seconds
  14. 14. A good narrative can do the following in 20 seconds First 10 seconds 1. Simply explain what you do 2. Communicate the single thing that’s most compelling Second 10 seconds 3. Outline your progress-to-date, future milestones, and long-term vision
  15. 15. Bad example “We provide data and analytics in a comprehensive project management suite, enabling audio content creators to glean insights that inform decisions throughout the production cycle.”
  16. 16. “We’re an analytics tool for podcasters, and we’re a team of former podcast producers who produced 5 of the 20 most downloaded podcasts of all time.” Good example
  17. 17. Support your narrative with a financial model Goal #1: Verify the story you’re telling Goal #2: Show the assumptions you’re making
  18. 18. The Tale of Two Stories ● From Hong Kong incubator network ● Making music is a superpower ● Practicing music is a pain ● Soundbrenner will make music practice addictive “Because music is, and will always be, about the most human thing that we can do…” ● From Harvard Innovation Lab ● How do humans learn? ● Too much unorganized information today to learn a subject properly ● Sophya matches the best learning content and tools with your individual needs, all on an online platform “Because schools need a more comprehensive platform to teach in an online world”
  19. 19. Tip #5: People > Firm
  20. 20. People > Firms • Fundraising is about relationships • Focusing on people is more effective than firm-hunting • People have different roles and investment focuses
  21. 21. A recent successful deal during pandemic
  22. 22. A recent successful deal during pandemic ● Automating content services for e-tailers globally such as ● Content services include taking pictures of products and writing a description of the product ● E-commerce bottleneck is in content services ● Surging demand to sell basic goods online ● Entire transaction done virtually, sourced through Betatron, an accelerator where CIV is a founding partner
  23. 23. More tips for raising funds post pandemic
  24. 24. Fundraising Post-Pandemic • Need to take a multi-perspective approach in seeing the world Post- Pandemic • Where was value before and how has it shifted? • What assumptions need to be revisited to reflect the New Normal? • 2008 GFC was a good catalyst for new businesses and ideas - what have we learned from the 2008 GFC? • Based on the above, how is your business going to thrive in this new environment?
  25. 25. Summary • You’re giving up scarce equity in your company, not asking for money • Create a sense of urgency by cultivating authentic competition • Startup <> Investor fit goes both ways • Build relationships before you need to fundraise • Put yourself in a position where you’ll have to say “no” to investors • This is a full-time process that should be done as quickly as possible • Remember the 3:1 rule
  26. 26. Thank you! © 2020, Amazon Web Services, Inc. or its affiliates. All rights reserved. CHAN, Sze Lok Sr. Startup Business Development Manager, AWS YAU, Roland Managing Partner, CoCoon Ignite Ventures