The Funding Game


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The Funding Game

  1. 1. The Funding Game David Tran | Co-Founder / COO of S
  2. 2. Do you need the money?S Funding important for scaling, intensive capital needs, accelerating growthS Funding much easier to get after proving concept (valuation also higher)S Not all startups need outside fundingS Advice: Go as long as you can without asking for money
  3. 3. GoPro
  4. 4. GoProS HD sports video camerasS Low cost HD Wearable Sports CameraS Sold shells from VW bug to get 10k USD for first patent
  5. 5. SmugMug
  6. 6. SmugMugS Multi-gigapixel photographyS Like Flickr but high qualityS Self-funded
  7. 7. PCH
  8. 8. PCHS Located in Shenzhen, ChinaS Huge supply chain companyS Needed $200k USD to build circuit boardsS Banks, VCs, turned them downS Founder Liam Casey asked factory to build it for him firstS Offered his passport as collateral
  9. 9. Do you need the money?S Hustle, hustle, hustleS Build prototype, demo, proof of concept before asking for moneyS If possible, find a way to acquire customers, get real world data, then seek moneyS If cash-flow is business supporting, may not need funding ever
  10. 10. Looking for moneyS Ideas are a “dime a dozen”S Investors want to know your team can pull it offS Management team covers all needed areas to succeed S Technology / Development, Marketing/Sales/BusinessS Prove the concept with real customers S Go out there and get customers with your product S “Pivots” are essential | Your original ideas rarely work
  11. 11. DropBox
  12. 12. DropBoxS Total VC capital funding of 257.2 MM USDS Valuation possibly > 1 Billion USDS Annual revenue > 240 MM USD for 2011S Very interesting method of getting initial funding
  13. 13. DropBoxS Founder Drew Houston originally use “Customer Development” methodology by Steve Blank S Customer Development process S Talking to customers S Using feedback to develop and refine productS Then, Drew Houston had an animated video created of a product that did not existS Shopped the video to investors as “alpha version” and got funded S … then built the product.
  14. 14. SummaryS Ideas are just ideasS You need to execute and test the market, to know what’s out thereS At least have working prototype to show people, get feedback loop (Customer Discovery)S Real data (proof) trumps all  funding at that point is just to scale a working model