1.
Ways to Raise Capital
For Your Startup
By Melissa Fisher, Managing Partner
www.PeakRoadPartners.com
1
@MelissaFisher7
www.linkedin.com/in/melissafisher7
MelissaFisher7@gmail.com
Entrepreneur
Conference

2.
• What investor options are there?
• Is my industry appealing to venture investors?
• Is my business appealing to venture investors; and
• if so, various ways for attracting capital for your business?
IN TODAY’S SESSION WE WILL TACKLE:

3.
OPTIONS FOR FUNDING:
Debt / Credit Cards Family & Friends
Crowdfunding Your Customers
Grants
Seed Accelerator Venture Capital
Angel Investors

4.
Upside:
• Don’t have to give up equity
• Available to companies that can’t get equity funding
Downside:
• Must pay interest
• Limited networking or “business savvy” value
• May require personal collateral such as home
Debt / Credit Cards
Family & Friends
Grants
http://www.startupnation.com/articles/financing-options-small-businesses/
Upside:
• Convenient, no nonsense
• Fewest contractual strings attached
• Available quickly
Downside:
• Limited one-time source of funding
• Be ready for an ugly Thanksgiving dinner at your in-laws
if you lose their money
Upside:
• Free money
• Investors love the “leverage” that grants provide
Downside:
• Highly competitive
• How you use the funds is strictly defined

5.
Upside:
• Don’t have to give up equity
Downside:
• Very public
• Doesn’t fund until you raise set goal
Crowdfunding
Your Customers
Upside:
• Believe in your ability
• Continued sales commitment
Downside:
• May require collateral (Personal or built business value)
• Insight into margins
Angel Investors Upside:
• More than money, they invest business smarts and
networking opportunities
• Relatively patient about their investments
Downside:
• Often difficult to find
• Can be hard to manage the divergent interests
of a large group of angels

6.
5 Phases: awareness, application, program, demo day, post demo day
Upside:
• Access to resources, mentoring, fundraise-readiness and collaboration
• If government funded they take no equity
Downside:
• Must be a “fast growth” startup business
• May have to give up equity %
• Must “graduate” within a short period of time.
Seed Accelerator

7.
Upside:
• Invest smarts and networking in addition to money
• Typically have more money if you need more to grow
Downside:
• Must be a “fast growth” startup business
• Must be interested in selling the business or going public within 3-5 yrs
• Must be prepared to share control
Venture Capital

8.
JOHN BORTHWICK
“Remember that funding is a means to an
end, not an end in of itself. The end is
building a product, building a community
and building a business. Raising money can
be a challenge – just remember it’s not the
end. It’s the beginning, it’s the starting point.
Now you have to build.”

9.
How Venture Capital Works
VC Firm
(General Partner)
VC Fund
(Limited Partnership)
Paid 2% fee + 10-20% of Profits
Limited Partners
(public pension funds, corporate pension funds, insurance companies,
high net-worth individuals, family offices, endowments, foundations,
fund-of-funds, sovereign wealth funds, etc.)
Investment 1
(Ownership %)
Investment 2
(Ownership %)
Investment 3
(Ownership %)
Fund Management
Ownership of Fund

10.
WHAT IS A SEED STAGE?
Series A, B, C+
$2.5M - $10M+
Out of ScopeIn Scope
Institutional Seed
$500K - $1.5M+
Accelerator
$20K-$150K
Angel
$25K-$250K
The seed is the “setup” round(s) where a
person or startup venture approaches an
angel or a VC firm for funding their product / idea.

11.
VC will help you scale but it absolutely
will not validate your product and market.
Raise to accelerate growth.
“The other time not to raise money is when
you won’t be able to. If you try to raise money
before you can convince investors, you’ll not
only waste your time, but also burn your
reputation with those investors.”
Paul Graham

12.
VC’s Reasons To Raise Funds
With VC FundingWithout VC Funding
Market
Timing
Expand
Network
Grow
Faster

13.
1. Use your network
2. Set your fundraising goal
3. Welcome feedback
4. Be penny-pinching
5. Be bold & bootstrap
Remember that an investor invests in your business to share your profits.
So make your idea attractable and sellable.
Getting your business funded starts with having a reasonable plan.

14.
IT TAKES MORE THAN SIX YEARS TO EXIT
Source: http://www.cbinsights.com/blog/trends/venture-capital-exit-timeframe-tech

15.
WHAT YOU CAN EXPECT
Fast – Scary – Thrilling

16.
HUGE EXITS ARE RARE

17.
HERE’S THE PROOF
The average successful
US startup has raised
$41M and exited at
$242M
The average
successfully acquired
US startup has raised
$29.4M and sold for
$155.5M
The average IPO-
bound startup raised
$162M before going
public
Source: http://info.crunchbase.com/2013/12/16

18.
VCS ARE RAISING CASH
Source: Preqin Special Report: US Venture Capital Industry (October 2013)

19.
SEED DEAL VOLUME REMAINS STEADY
Source: http://www.cbinsights.com/blog/trends/2013-seed-venture-capital

20.
DOLLARS INVESTED ALSO REMAIN CONSISTENT
Source: http://www.cbinsights.com/blog/trends/2013-seed-venture-capital

21.
SIZE OF SEED ROUNDS ARE GROWING!
Source: http://www.cbinsights.com/blog/trends/2013-seed-venture-capital

22.
INVESTORS FOCUSING ON NEW FRONTIERS
Cloud Compute
Social Platforms Digital Currency
WearablesConnected HomeContext Compute
Connected Cars UAVs
Mobile ServicesPrivate Space Bioinformatics Industrial Internet

23.
HURDLES TO CROSS WHEN
ASSESSING YOUR STARTUP BUSINESS
 Are you B2C focused or B2B focused?
 Are you a sales driven or marketing driven company?
 Do you need $1MM or $25MM to succeed?
 Do you have one time revenues, or a recurring revenue model?
 Are you the first mover in your market or entering a highly-competitive
space?
 Is your technology patentable or not?
 Is your business easily and cheaply scalable, or does it have heavy
overhead investment along the way?
 Are you serving a $1BN market, or a $100MM market?
 Is my forecasted ROI going to be a 10x return or 3x return?
 Is it a first time CEO, or an established veteran?
 How deep is the management team? Has there been proof of concept,
with revenues or site traffic to date?
 and more…

24.
NOTABLE ANGELS
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Bill
Warner
Gary
Vanyerchuk
Esther
Dyson
Mike
Lazerow
Naval
Ravikant
Dharmesh
Shah
Jason
Calacanis
Joanne
Wilson
Max
Levchin
Elad
Gill
Mitch
Kapor
Karl
Jacob
Scott
Belsky
Paul
English
Dave
Morin
Michael
Birch
David
Tisch
Mark
Cuban
Kal
Vepuri
Jerry
Neumann
Lee
Linden

25.
ACCELERATORS
A three to six month “startup boot camp” that provides
mentoring, office space and access to capital in
exchange for 3-6% of common stock.

26.
NOTABLE SEED FUNDS
Seed funds tend to invest $50K - $750K in an
institutional seed round which is usually up to
$1.5M. These funds invest together as a syndicate.

27.
VCs w/ SEED DEALS
VCs typically lead $3M-$10M+ Series A rounds but some
invest $50K - $1M in seeds to back great founders and / or
learn about emerging tech.

28.
CORPORATE VCs
Corporations often have funds that invest in startups for
strategic and / or financial reasons. These funds typically
focus on Seed and Series A.

29.
“Try not to fall in love with a firm – focus
more attention on the partner leading the
deal. Ultimately that partner will be the
person you have to deal with so raising from
a great firm but putting someone on your
board that you don’t love won’t end up
working out.”
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Ben Lerer

30.
Raising any amount of capital is never easy.
You’ll hear “no” more than you’ll hear “yes.”
For many of you it will be a long but rewarding process.
IN SUMMARY
 VC is just one financing option to consider
 Investors come in difference sizes and flavors
 Raise to accelerate growth
 Prepare, work your ass off and hustle
 Take advantage of resources on the web
 The real work begins after you raise