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Alex Iskold, Managing Director
alex.iskold@techstars.com
@alexiskold alexiskold.net
Techstars NYC
Seed Funding Gotchas
1. Lack of Preparation
★ Under prepared for fundraising
★ Didn’t understand all the pieces
★ Didn’t think it all through &...
2. Lack of Traction
★ Even if idea is good, there may not be enough progress
★ Traction is subjective (growth is more obje...
3. Being pulled into
fundraising
★ Other founders casually introducing you to investors
★ Investors reaching out, encourag...
4. Chasing wrong
people
★ Not every bag of money is your bag of money
★ Angels, Micro VCs, VC firms - are vastly different...
5. Not pitching VCs &
Angels Correctly
★ Different investors write different check sizes
★ Different firms make money in d...
6. Not having an
overall strategy
★ Who will you go to first? Angels/VC?
★ How much are you raising?
★ Whats your pipeline...
7. The I’am special
problem
★ All of us feel that we are special
★ We tell ourselves only others loose in Las Vegas
★ Don’...
8. Not realizing you
are running a race
★ Once you start, the clock starts ticking
★ Word travels fast, investors talk
★ Y...
9. Running out of
bullets
★ Don’t talk to everyone at once, stagger the conversations
★ If you run out of bullets you can ...
Alex Iskold, Managing Director
alex.iskold@techstars.com
@alexiskold alexiskold.net
Techstars NYC
Seed funding gotchas
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Seed funding gotchas

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A bunch of gotchas the first time founders should be aware of when raising seed round

Published in: Investor Relations
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Seed funding gotchas

  1. 1. Alex Iskold, Managing Director alex.iskold@techstars.com @alexiskold alexiskold.net Techstars NYC Seed Funding Gotchas
  2. 2. 1. Lack of Preparation ★ Under prepared for fundraising ★ Didn’t understand all the pieces ★ Didn’t think it all through & rushed in It takes a lot of time, data, focus, research, strategy, etc.
  3. 3. 2. Lack of Traction ★ Even if idea is good, there may not be enough progress ★ Traction is subjective (growth is more objective) ★ Founders typically think their traction is bigger than it really is (50% WoW growth from 2 customers isn’t initially impressive) No traction means very difficult to raise, especially for 1st time founders
  4. 4. 3. Being pulled into fundraising ★ Other founders casually introducing you to investors ★ Investors reaching out, encouraging you to raise ★ Someone commits and you start raising Don’t let others set the agenda. Fundraise on your timeline.
  5. 5. 4. Chasing wrong people ★ Not every bag of money is your bag of money ★ Angels, Micro VCs, VC firms - are vastly different ★ Many investors are highly specialized Understand who is who and what they are looking to invest in.
  6. 6. 5. Not pitching VCs & Angels Correctly ★ Different investors write different check sizes ★ Different firms make money in different ways ★ Smaller checks happen faster, larger checks take time Understand the process, check sizes, and motivation of investors
  7. 7. 6. Not having an overall strategy ★ Who will you go to first? Angels/VC? ★ How much are you raising? ★ Whats your pipeline? How will you get the intros? Mapping it all out is very important so you can run a process
  8. 8. 7. The I’am special problem ★ All of us feel that we are special ★ We tell ourselves only others loose in Las Vegas ★ Don’t get happy ears Don’t bet on being special / lucky, prepare & put together the case.
  9. 9. 8. Not realizing you are running a race ★ Once you start, the clock starts ticking ★ Word travels fast, investors talk ★ You don’t want to become stale deal everyone saw Plan the raise and build up real momentum.
  10. 10. 9. Running out of bullets ★ Don’t talk to everyone at once, stagger the conversations ★ If you run out of bullets you can go back in 6-9 months if you make a lot of progress Fire every shot carefully and deliberately
  11. 11. Alex Iskold, Managing Director alex.iskold@techstars.com @alexiskold alexiskold.net Techstars NYC

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