What are the most important tactics for raising capital to fund a new startup? I break it down into 6 easy (or at least relatively simplified) steps, and highlight the key decision points that an entrepreneur will encounter.

1. How to Raise Startup
Capital in 6 Easy Steps
by Eric M. Jackson
CEO of CapLinked; author of The PayPal Wars

2. 6 Steps to Funding
1. Structure Your Deal
2. Prepare Your Documents
3. Identify Your Leads
4. Make Your Pitch
5. Follow Up
6. Close the Deal

3. #1: Structure Your Deal
 Size of the Deal
 Valuation
 Pre-Money vs. Post-Money
 20% Rule of Thumb
 Equity or Debt
 Stock: Common vs. Preferred
 Convertible Notes
 When Do You Close?
 Important: Work with an Attorney!

4. #2: Prepare Your Documents
 Slide Deck vs. Business
Plan
 Capitalization Table
 Financial Projections
 Transaction Documents:
 Term Sheet
 Purchase Agreement
 Shareholder Rights
Agreement or Convertible
Note

5. #3: Identify Your Leads
 Put Your Network to Work
 What Do You Mean You Don’t Know Anyone?!?
 Ask for Referrals
 Accredited Investors
 Regulation D + Subsequent Rounds
 VCs vs. Angels vs. Super Angels
 Other Investor Sources:
 Angel Groups (TCA, Pasadena, Maverick)
 3rd Party Sites: LinkedIn, AngelList, CapLinked

6. #4: Make Your Pitch
 Get an Intro (don’t cold email)
 Share Information w/ Them (slides, deal room)
 Set up a Meeting or Call (only if interested)
 Meeting Checklist:
 Elevator Pitch
 Problem You’re Solving
 Market Size
 Business Model
 Traction
 Listen!!!

7. #5: Follow Up
 Sorry, You’re Not That Hot… (So Persistence Will Be
Required!!!)
 Track Your Leads
 Send Updates
 Due Diligence
 Make Sure Questions are Clear
 Getting an Answer
 Angels Don’t Like to Say No

8. #6: Close the Deal
 From Slow to Fast
 Let Prospects Know as Round Fills Up
 Typical Closing Process:
 Collect Signed Documents
 Confirm Wires
 Counter-Sign Documents
 Announce to Media
 Start Working on Next Round

9. Good Luck!
www.caplinked.com
@ericmjackson