1.
HBS Field Y
Fundraising 101: How to pitch and land your first investors
D AV I D C H A N G
@ C H A N G D S

2.
Fundraising
Basics
How to Raise
a Round
Pitch Tips

3.
Background

4.
Startup Experiences

5.
Angel Investments
Direct Syndicate/Fund
TBD Angels

6.
What obstacles stand in your way?

7.
What’s the business trajectory?
Lifestyle or social good
Linear growth or revenue fueled
High growth, scalable venture

8.
Where to get that first dollar?
Revenue

9.
• Active VC List, DocSend
• Investors meeting during
COVID-19
• Plan for longer runway
• Valuations hit 20-30%

10.
Venture capital stages
Growth Equity
Early Stage
Angel
Friends & Family

11.
How the VC game works
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 product
• Grow 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.
Fundraising
Basics
How to Raise
a Round
Pitch Tips

17.
Prep Target Socialize Raise Close
Run a 5-step fundraising campaign

18.
Basic Prep
✓ Legal representation
✓ Founders agreements
✓ Financials and budget
✓ Blurb (1 paragraph) / teaser (1 page)
✓ Pitch deck (10 slides)

19.
Hone in on target criteria
Stage
Location
Industry
Vertical
Investment
Thesis Business
Model Social /
Trust Filter

20.
Tools to build the pipeline

21.
University Focused
Corporate VC
bit.ly/boston-area-investors-firms
Local Investors
Angel Groups
Seed
Stage
Growth
Stage
Early
Stage
VC
Tech
VC
Healthcare, Biotech, Energy

22.
Socialize
• Prioritize sequence
• Find strongest connections to 30+ targets
• Tactics: lead gen, cold calling, warm intros
• Network over 2-3 months

23.
Don’t ask for money!
Improves hit rate Creates data points Doesn’t start the clock
“Who else should I talk to?”
“I’m not ready to raise”
“Who would be helpful?”

24.
Refine pitch
• Incorporate feedback
• Double down on consistent themes
• Avoid whiplash changes

25.
Go for it! Create FOMO
• Approach your top candidates at the same time
• Decide whether to tell investors about each other
• Land anchor investor as the first domino
• Use triggering events to get or improve term sheets
“I’m closing a round”

26.
Structure
Equity

27.
• 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

28.
• 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

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 ownyourventure.com
See dlopuch.github.io/venture-dealr
Raise $1M on $5M pre
34%
Raise $1.5M on $5M pre
33%
Raise $1M on $3M pre
Dilution: what’s your end stake?
Valuation ($M)
Seed A B
$15
$6
$1
$30
$12
$5

31.
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)
How soon to start, how long it takes,
general timeline you can expect, how to
reduce time between the initial outreach
and closing a deal?

32.
Choose your investors carefully
What characteristics to look for in a
venture partner?

33.
• 1 Paragraph
• 1 Page
• 1 Light Deck
• 1 Follow-up Deck

34.
Articulate in 90 seconds
Why you’re the right team
Know numbers and
business model cold
Kevin O’Leary

35.
www.garage.com/resources/perfecting-your-pitch
10 slides
20 minutes
30 point font
Guy Kawasaki’s tips

36.
pexels.com

37.
thenounproject.com

38.
Typical Parts
Overview Problem Solution
Market
Opportunity
Go-to-Market Traction
Revenue &
Business Model
Team
Competitive
Landscape
Financial
Projections
Ask & Use of
Proceeds
Conclusion

39.
www.nextviewventures.com/blog/free-startup-pitch-decks-template

40.
www.bestpitchdecks.com

41.
Resources
• Legal
• Goodwin Procter www.foundersworkbench.com
• Foley & Lardner www.foley.com
• Pierce Atwood
• Techstars www.techstars.com/docs
• www.seriesseed.com
• General
• www.jddavids.com
• www.robkornblum.com
bit.ly/startresources

42.
Q&A
D AV I D C H A N G
@ C H A N G D S