SlideShare uses cookies to improve functionality and performance, and to provide you with relevant advertising. If you continue browsing the site, you agree to the use of cookies on this website. See our User Agreement and Privacy Policy.
SlideShare uses cookies to improve functionality and performance, and to provide you with relevant advertising. If you continue browsing the site, you agree to the use of cookies on this website. See our Privacy Policy and User Agreement for details.
Successfully reported this slideshow.
Activate your 14 day free trial to unlock unlimited reading.
HBS Field Y - Fundraising 101 - How to raise a round - April 2021
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
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”
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?
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