1. FUNDRAISING 101:
HOW TO PITCH AND LAND YOUR FIRST INVESTORS
DAVID CHANG
@CHANGDS
H B S F I E L D X

2. BACKGROUND

3. STARTUP EXPERIENCES

4. Direct Via Syndicate/Fund
ANGEL INVESTMENTS

5. NOW
Building Investing Connecting

6. Fundraising
Basics
How to Raise
a Round
Pitch
Tips

7. WHAT OBSTACLES STAND IN YOUR
WAY?

8. CAPITAL SOURCES
You hear a lot about
• Venture Capital
• Angel Groups
• Crowdfunding
• Friends and Family
• Customers
• Accelerators
• Competitions
Not much about
• SBA Loans and Personal
Debt
• Grants
• Corporate Venture
• Vendors or Equipment
Finance
• Bootstrapping (creatively)

9. BUSINESS TRAJECTORY
Lifestyle
business
Bootstrap
Loans
Growth oriented
business
Crowdfunding
Personal raise
High growth
scalable business
Venture
Capital

10. VENTURE CAPITAL STAGES
Growth Equity
Early Stage
Angel
Friends & Family

11. VENTURE CAPITAL DYNAMICS
Skewed return distribution
VCs must swing for the fences

12. RAISING A ROUND

13. HOW MUCH TO RAISE
• Basic financial model of
cost drivers and revenue
• Forecast monthly for 2
years
• Fundraise rule of thumb:
12-18 months’ cash

14. USE OF PROCEEDS
• Build out the product
• Grow the team
• Marketing
• Customer acquisition
• Working capital

15. MILESTONES
See www.techcrunch.com/2015/06/24/running-out-of-money-isnt-a-milestone
Team
Product Development
Market Demand
Product / Market Fit
Business Model
Execution

16. How to Raise
a Round

17. FUNDRAISING CAMPAIGN
Prep Target Socialize Raise Close

18. BASIC PREP
✓ Legal representation
✓ Founders agreements
✓ Financials and budget
✓ Teaser (1 page)
✓ Pitch deck (10 pages)

19. TARGET CRITERIA
Stage Location
Industry
Vertical
Business
Model
Investment
Thesis
Social /
Trust Filter

20. BUILD PIPELINE

21. SOCIALIZE
• Prioritize sequence
• Find strongest connections to 30+ targets
• Tactics: lead gen, cold calling, warm intros
• Network over 2-3 months

22. DON’T ASK FOR MONEY!
“I’m not ready to raise”
“Who would be helpful?”
“Who else should I talk to?”

23. REFINE PITCH
• Incorporate feedback
• Double down on consistent themes
• Avoid whiplash changes

24. GO FOR THE ASK
• Approach your top candidates at the same time
• Run conversations in parallel
• Decide whether / when to tell investors about each
other

25. CREATE URGENCY
• Anchor investor acts as the first domino
• “Triggering events” to get a (or better) term sheet

26. STRUCTURE
Equity
Debt

27. STRUCTURE
• Preferences over common
• Board seat or 2
• Option pool
• Liquidation preference
• Control over sale, new options
• Debt that becomes preferred equity
when you raise it
• No valuation, but the “cap” is a
ceiling
• Interest accrues, rate <10%
• Conversion discount
Equity
Preferred Stock
Debt
Convertible Notes, SAFEs

28. CLOSING THE DEAL

29. Seed A B
$15
$6
$1
$30
$12
$5
VALUATION & DILUTION
?
Dilution: what’s your end stake?Valuation ($M)
?

30. VALUATION & DILUTION
37%
See www.ownyourventure.com
Raise $1M on $5M pre
33%Raise $1M on $3M pre
34%Raise $1.5M on $5M pre
Dilution: what’s your end stake?Valuation ($M)
Seed A B
$15
$6
$1
$30
$12
$5

31. FINAL DEAL POINTS
• Rolling close vs. set close
• Not done until money is in
the bank
Key terms
❑ Board composition
❑ Option pool
❑ Voting rights
❑ Founder vesting
❑ Change of control
❑ Redemption rights
❑ Information rights
❑ Anti-dilution

32. HOW LONG DOES IT TAKE?
• Longer than you expect
• 3-6 months
• Speed limited by access to investors
• Your ability to find them
• Calendar availability (surprisingly hard)

33. FINDING THE RIGHT INVESTORS

34. Pitch
Tips

35. KNOW YOUR AUDIENCE

36. ADJUST FOR THEIR STYLE

37. LEVERAGE YOUR NATURAL STYLE

38. SHARE YOUR SUMMIT & BASECAMP

39. DON’T SHARE EVERYTHING AT ONCE
• 1 Sentence
• 1 Paragraph
• 1 Page
• 1 Light Deck
• 1 Follow-up Deck

42. RESOURCES
• Pitch
• The Best Startup Pitch Decks www.bestpitchdecks.com
• NextView www.nextviewventures.com/blog/free-startup-pitch-decks-template
• Guy Kawasaki: 10 slides / 20 minutes / 30 point font
• www.mjskok.com/resource/getting-behind-perfect-pitch
• Legal
• Pierce Atwood
• Foley & Lardner www.foley.com
• Goodwin Procter www.foundersworkbench.com
• Techstars www.techstars.com/docs
• www.seriesseed.com
• General
• www.jddavids.com
• www.robkornblum.com

43. FUNDRAISING 101: Q&A
DAVID CHANG
@CHANGDS
H B S F I E L D X