This document provides an overview of startup fundraising and the investment process. It discusses reasons to raise funds such as accelerating growth and network expansion. It also covers different funding options like bootstrap funding, angels, venture capital (VC), and debt. The fundraising process takes around 6 months and involves determining the funding round needed, building an investment pitch, and networking. The pitch should include an elevator pitch, executive summary, financial projections, and pitch deck highlighting the company, team, product, and market opportunity.

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Startup Fundraising 101:
Are You Ready for an Investment
Round?
Shayne Veramallay
Venture Pipeline Manager
DLA Piper
Sirk Roh
COO
Early Growth Financial Services

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3. • Why raise funds?
Funding options
• Fundraising
process
• Network
• What investors
want to see
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4. Reasons to Raise Funds
Accelerate growth
Network expansion
Timing
NOT for product / market validation!
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5. Funding Options and the Business Life Cycle
**Please Note: These are tendencies and not a
hard fast rules. Many financings happen outside of
these terms.
Operating: Customer and Vendor Terms
↵
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Bootstrap/Self
Family and Friends
Venture Debt
Strategic Investors
Angels
VC (seed venture and early stage equity)
Banks
Crowdfunding
Ideation Launch & Traction Growth & Scale Breakout Established
$0 $0-$1M $1M -$5M $5M + $MMs

6. Friends and Family
• Convertible debt
better than equity
• Transparency
• Only take money
that people can
afford to lose
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7. Angels and Super-Angels
• HNW individuals
• Not sophisticated investors
• Smaller funds ($25-250K
range)
• 3-6 month process
• Have a point person
• More institutionalized
• Functions like VC: process
analysts
• Due diligence & term sheets
• Convertible debt or SAFE
• You’ll need to worry about
valuation – what’s
appropriate valuation?
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8. Micro-VCs and Traditional Venture Capitalists
Traditional VCs
•Greater capital investment
•Greater network
•Thorough due diligence
•Greater dilution
•Greater investor
involvement
•Increased funding =
increased expectations
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Micro-VCs
•New breed
•AUM ~ $10-50M
•Typically do seed and Series A
•May or may not be with you for
entire life cycle of raise
•Need to understand
sectors/focus: B2B, B2C, regions,
important criteria
•Operator sympathetic

9. Venture Debt
• On top of venture investments
• Way to extend runway and reduce dilution
• Based on VCs more so than your company
• Financing alternatives for recurring revenue
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10. Convertible Debt vs Equity
Entrepreneurial advantage: CD Investors often push for equity
• From valuation and dilution perspective, CD is cheaper & quicker
• Current marketplace: less CD
• Typical terms
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11. Fundraising Game Plan
• Milestone financing
• How much money do you need to raise?
• 10-25% “fudge factor”
• What’s that money going to be used for?
• At what cost and with what terms and conditions?
• What type of capital is the best fit for your company, and why?
• Where do you find the type of financing you need?
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12. How Much Should You Raise?
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13. The Fundraising Process
• Business development
process
• Timing – 6 months out
• Determine your funding
round
• Build your value proposition
• Rely on your ecosystem for
investor intros
• Evaluate and select key
service providers
accordingly – ancillary value
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14. Choosing Your Target VC
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15. Network
• Target key players
• Networking game – build targeting list of all VCs in your
region, stage, industry. How are you connected to them?
• Introductions are strongest access point
• Network with other entrepreneurs
• Start early
• Co-los and incubators = good!
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16. What You Need to Present to Investors
• Elevator pitch
• Executive summary
• Pitch deck
• Financial model
*Reference: Guy Kawasaki, Art of the Start & Marc Phillips, Inside Silicon Valley
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17. Key Slides in Your Pitch Deck
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**Courtesy of Marc Phillips’ Inside Silicon Valley: How the Deals Get Done

18. Financial Slides: What to Include
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19. www.earlygrowthfinancialservices.com
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Top-Down Financial Projection

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Bottom-Up Financial Projection

21. Pitch Deck and Pitching Tips
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• Let the best pitcher pitch
• Pitch the company, the team,
and the product; not the
problem
• Charts and graphs: replace
words with a simple graphics
and charts
• Know your numbers really well
(but no excel spreadsheets –
save that for diligence!)
• Short sentences, non technical
speak
• Investors watch body language
• Control emotion, be prepared
for conflict

22. Thank You and Q&A
Shayne Veramallay
973-520-2542
Shayne.veramallay@dlapiper.com
www.dlapiper.com
Follow us @DLA_Piper
Sirk Roh
415-234-3437
contact@earlygrowthfinancialservices.com
www.earlygrowthfinancialservices.com
Follow us @EarlyGrowthFS
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