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11 Fundraising secrets from 1600 startups

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11 Fundraising secrets from 1600 startups

  1. 1. ELIZABETH YIN PARTNER #saastrannual 11 Funding Secrets Learned from 1600 Startups
  2. 2. 11 Funding Secrets Learned from 1600 Startups #saastrannual ABOUT ME • Partner at 500 Startups • Have seen 20k+ pitches in ~2 years • Co-founded / CEO of LaunchBit (acq BuySellAds) • Raise $1m+
  3. 3. 11 Funding Secrets Learned from 1600 Startups #saastrannual HOW MANY OF YOU HAVE RAISED MONEY? • Seed round? • Series A? • Series B? • Series C or above?
  4. 4. 11 Funding Secrets Learned from 1600 Startups #saastrannual 1) INVESTORS DON’T NEED EVERY STARTUP TO WIN IN ORDER TO MAKE MONEY • Approximate breakdown of 500 Startups seed program batches • Sample size: 30-50 companies per batch • 2011-present Estimated as of 1/31/2017 based on the General Partners' current valuations of portfolio companies who completed the seed program across 500 Startups funds in line with the 500 Startups Valuation Policy.
  5. 5. 11 Funding Secrets Learned from 1600 Startups #saastrannual 2) WINNERS MUST WIN BIG • ~10% of portfolio are breakout companies • Investors make money ONLY if breakouts are BIG breakouts • E.g. 50-100x vs 5-10x Estimated as of 1/31/2017 based on the General Partners' current valuations of portfolio companies who completed the seed program across 500 Startups funds in line with the 500 Startups Valuation Policy.
  6. 6. 11 Funding Secrets Learned from 1600 Startups #saastrannual 3) IN FACT, WHICH BATCH IS DOING BETTER? Estimated as of 1/31/2017 based on the General Partners' current valuations of portfolio companies who completed the seed program across 500 Startups funds in line with the 500 Startups Valuation Policy.
  7. 7. 11 Funding Secrets Learned from 1600 Startups #saastrannual 4) THIS IS WHERE THE UNICORN OBSESSION COMES FROM Unicorns are companies that • Have raised money at $1B+ valuations • Have exited for $1B+ Img credit: clipartfest.com
  8. 8. 11 Funding Secrets Learned from 1600 Startups #saastrannual 5) HOW DO YOU BECOME “FUNDABLE”?You • Are in a hot space • Have a “hot” team • Are growing above-and-beyond-quickly • Have built a really difficult technology • …
  9. 9. 11 Funding Secrets Learned from 1600 Startups #saastrannual 6) BUT MOST STARTUPS DON’T HAVE THESE CHARACTERISTICS The best entrepreneurs get funded because… They execute their fundraising process well
  10. 10. 11 Funding Secrets Learned from 1600 Startups #saastrannual 7) CREATE FORCING FUNCTIONS How to create urgency the right way with concrete timelines • “I’m moving into 3 all-partner meetings next week on Sand Hill” • “I’m taking 4 investor meetings per day”
  11. 11. 11 Funding Secrets Learned from 1600 Startups #saastrannual 8) WRONG: THIS DOES NOT CREATE URGENCY How NOT to create urgency • “My round is closing next week” • “We have lots of investor interest” • “I need the money now”
  12. 12. 11 Funding Secrets Learned from 1600 Startups #saastrannual 9) THIS MEANS YOU NEED TO LINE UP ALL YOUR INVESTOR MEETINGS TOGETHERCondense your fundraising meetings to • Create urgency • Drive up your valuation / create competition Start scheduling these meetings 4 weeks in advance • Do your research / build a list • Investors have busy schedules - set your meetings up in advance
  13. 13. 11 Funding Secrets Learned from 1600 Startups #saastrannual 10) DRIVE MEETINGS FORWARD AND CLOSE Get a concrete next step
  14. 14. 11 Funding Secrets Learned from 1600 Startups #saastrannual 11) KNOW WHERE YOU STAND Rough SaaS fundraising metrics • Revenue: • Seed: $100k ARR • Post seed: $500k ARR • Series A: $2M ARR • Growth: • 10-30% MoM • Churn: • 1-3% Monthly
  15. 15. 11 Funding Secrets Learned from 1600 Startups #saastrannual THANKS (& READ MY BLOG ON FUNDRAISING) • blog.elizabethyin.com • @dunkhippo33

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