Lakeside Ventures - How to obtain VC financing for my startup
Excellence inManagementEducationHow to obtain VC financingfor my startupSDW Forum for Founders and EntrepreneursBerlin, May 2013
29.05.2013 Slide 2Lakeside Ventures 2013 Introduction Every startup is different Landscape of financing sources Prepare for the battle (of fundraising) How to evaluate a VC Term sheet & shareholders agreement Enter fundraising – the heat is on!Agenda
29.05.2013 Slide 3Lakeside Ventures 2013 Most scalable startups require external financing Fundraising can be crucial for the creation of a viable scalable business! Challenges to overcome Many founders fight for attention of the same investors Founders may struggle to „sell“ their startup Founders may underestimate lead time and difficulty of fundraising (3+ months VCfunding lead time is not unusual) Founders may spend 50%+ of their time on fundraising (which distracts them fromdeveloping their business) just when producing good news is a must Founders may not be able to negotiate on eye level with investors (one-time eventfor them vs. day-to-day routine for investor)Introduction
29.05.2013 Slide 4Lakeside Ventures 2013 Business model type innovation vs. execution & lowvs. high competition Game of technology, sales, marketing,sourcing, funding,… Stage & capital requirements Seed, early stage, later stage Team composition & professional experience First-timers, industry professionals, seasoned entrepreneurs Achievements & current status Demo/prototype/beta, customers, revenue, intellectual property,… Sector E-commerce, social, mobile app, content discovery, SaaS, … Scalability Tech, marketing, sales, sourcing… Internationalization, vertical integration, horizontal integration Location Determine the „configuration“ of your startupEvery startup is different
29.05.2013 Slide 5Lakeside Ventures 2013 Bootstrapping & Family/Friends/Fools Business Angels (smart vs. dumb money) Incubators Crowdfunding Public Grants Venture Capitalists(stand-alone vs. corporate)Determine your window of opportunityand risk propensityDetermine the right financing source(s)for your startupLandscape of financing sources
29.05.2013 Slide 6Lakeside Ventures 2013Get help from somebody who has done it before! e.g. serial entrepreneurs, advisory board members, specialized (!)consultants with track recordCreate professional investment materials (investor presentation, financial plan)Create longlist and shortlist of potential investors within relevant categoriesPrepare company and team for due diligence (technical, financial, legal,…)Prepare for battle (of fundraising)
29.05.2013 Slide 7Lakeside Ventures 2013 Fund size Power for follow-up rounds Stage focus early stage, later stage Activity level Number of deals / year Sector experience SaaS, e-commerce, social, mobile, B2B, … Portfolio composition Reputation & exits Connection to other VCs (syndication) International profile Strategic value In-house exit channel In-house customer acquisition Check websites Talk to founders of portfolio companiesHow to evaluate a VC
29.05.2013 Slide 8Lakeside Ventures 2013 Investment amount Company valuation Other economic terms Liquidation preference Tag-along & drag-along Follow-up rounds Milestones Other control terms Shareholder consents Board seat Buy-in to vision & strategic alignment Long-term commitment (e.g. recognizing „valley of death“) Personal fit to investment professional assigned to your startupTerm sheet & shareholders agreement
29.05.2013 Slide 9Lakeside Ventures 2013Create Attention Always try to get intros to investors from your lists Elevator pitch (sell!) to investment professionals as soon and often as possible Track & monitor all approaches Don„t take NO as a (first) answer Create Interest Follow-up relentlessly, but provide good news if you can! Mention positive interactions with other VCs Identify most common concerns and improve investment materials accordingly Create Desire Pitch your company (usually 60min) in person to most senior persons you can find Be the „almost-missed opportunity“ and try to build up urgency Trigger Action Obtain your first term sheet Continue talks with further investors to create/maintain backup or better options Negotiate a better offer Enter and make it through due diligenceSigning & closing Final negotiations Appointment with the notary And never forget:„The deal is only closed once you see fresh money on your bank account!“Enter fundraising – the heat is on!
29.05.2013 Slide 10Lakeside Ventures 2013“Our passion is to create purposeful and sustainable entrepreneurial ventures” Entrepreneurs, please contact us! www.lakeside-ventures.comThank you very much for your undivided attention!