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Fundraising ABC’s


How to raise a seed round
D AV I D C H A N G


@ C H A N G D S
davidchang.me/startup-tips
Fundraising
Basics
How to Raise
a Round
Pitch
• Active VC List, DocSend


• Investors meeting during
COVID-19


• Plan for longer runway


• Valuations hit 20-30%
Venture capital stages
Growth Equity


Early Stage


Angel


Friends & Family
How the VC game works
Skewed return distribution


VCs must swing for the fences
Raising a Round
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
Use of Proceeds
• Build product


• Grow team


• Marketing


• Customer acquisition


• Working capital
Milestones
See techcrunch.com/2015/06/24/running-out-of-money-isnt-a-milestone
Team
Product Development
Market Demand
Product / Market Fit
Business Model
Execution
Fundraising
Basics
How to Raise
a Round
Pitch
Aim at a
Tight
Target
Target investors using 6 filters
Stage
Stage
Location
Location
Stage
Industry
Location
Stage
Industry
Business


Model
Business


Model
Location
Stage
Industry
Thesis
Thesis
Business


Model
Location
Stage
Industry
Social /


Trust
Social /


Trust
Your ideal investor meets 6 filters
Thesis
Business


Model
Industry
Location
Stage
Tools to build the pipeline
bit.ly/boston-area-investors-firms
University Focused
Corporate VC
Angel Groups
Seed
Stage
Growth
Stage
Early
Stage
VC


Tech
VC


Healthcare, Biotech, Energy
Boston-area Investors
B


Break
down
Barriers
“Looking for feedback on the idea”
“Who’s knowledgeable in this space?”
“I’m not raising right now”
“If you want money, ask for advice…”
Improves


hit rate by 10x
Doesn’t start


the clock
Creates trend


from data points
Why not just ask for money?
Don’t make knee-jerk changes
Incorporate


feedback
Refine pitch
Spot consistent


themes
When to stop fishing?
C


Create


FOMO
Land the anchor investor
“I’m closing a round”
“Can I hold a space for you?”
Finish strong
Full throttle to avoid mid-flight stall


Leverage current investors to pull in new ones


“Oversubscribe” optics
Aim at a tight target
Break down barriers
Create FOMO
The ABC’s
Structure
Equity
• 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
• 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
Seed A B
$15
$6
$1
$30
$12
$5
Valuation & Dilution
?
Dilution: what’s your end stake?
Valuation ($M)
?
Prep Target Socialize Ignite Close
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
Prep Target Socialize Ignite Close
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?
Choose your investors carefully
What characteristics to look for in a
venture partner?
1 Paragraph


1 Page


1 Deck


1 Follow-up Deck
Adapt content to the venue
Home Office
Coffee Shop
Don’t overreact to feedback
Incorporate feedback


Double down on consistent themes


Avoid whiplash changes
Don’t be sloppy and miss details
Typoos


capitalization & punctuation,


Font & sizes


Alignment


Color


Design (icons, photography, clip art)
Typical Parts
Intro Problem Solution
Market
Opportunity
Product
Go-to-
Market
Business
Model
Competition
Traction Team Ask Appendix
nextviewventures.com/blog/free-startup-pitch-decks-template
pillar.vc/playlist/templates/?category=fundraising
docsend.com/view/imabk5rdkv6sd8hx
zoebarryceo.com
beautiful.ai/presentations/startup-pitch-deck
thenounproject.com
For inspiration…
slidebean.com/template-category/startups


docsend.com/blog/pitch-deck-examples


medium.com/pitchdecks


visme.co/blog/best-pitch-decks


bestpitchdecks.com


businessinsider.com/pitch-deck-library-series-
a-funding-round-startup-pitch-decks-2019-8
bit.ly/startresources


davidchang.me/startup-tips
Marketing


Press / Media


Freelancers


Agencies


National Tech Journalists


Boston Tech Journalists


Legal


Legal Templates


Accounting


Recruiters


Real Estate


Co-working


Brokers


Events


Event Spaces


Startup Events Listings


Startup Community Groups


Speakers/Mentors (WIP)


Boston Women Leaders


Investors


Guides


Lists


Materials / Templates


University Entrepreneurship Resources


Competitions


Student Groups
Startup Resources
General Guides


Development


Web Dev Shops


Mobile App Dev Shops


Tech Talent / Advisors


Mobile App Development Tools


Design / UX


Graphic Design Resources


Full-time


Freelancers


Agencies


Product


Pros


Emerging Stars
Fundraising ABC’s


Q&A
D AV I D C H A N G


@ C H A N G D S
davidchang.me/startup-tips

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Venture Lane Studio - Fundraising ABC's - Jan 2022