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Capital raising guide plus pitching bonus

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A rough guide to capital raising plus some bonus ideas on pitching. Aimed at early stage technology startups.

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Capital raising guide plus pitching bonus

  1. 1. 1 The Adventure of Capital Raising Mick Liubinskas muru-D, Pollenizer, Startmate 2015
  2. 2. 2 Let’s Pitch!
  3. 3. 3 Did you remember any of those? Which made you want to follow up? Did you understand it?
  4. 4. 4 My Mission Today Every single person, Action one of these ideas, In the next 24 hours
  5. 5. 5 This Workshop Practical Interrupt Be a case study Mick Liubinskas – Innes 48 - 2015
  6. 6. 6 Who is Mick?
  7. 7. 7 Who is Mick?  3 kids, surfer, cook, author  Entreprenerd since 16  6 businesses, 2 wins  17 investments, 2 wins, 7 “alive”  muru-D, Pollenizer, Startmate
  8. 8. 8 Who is in the room Who wants to capital raise? Why?
  9. 9. 9 About Capital Raising
  10. 10. 10
  11. 11. 11 About Capital Raising Avoid the hype Business, not a startup Hard to learn and to do But it is learnable
  12. 12. 12 Before You Start Think about it Get advice Think about it some more Take it seriously
  13. 13. 13 You Are Finding An Investor Not someone to give you money Partner 10x
  14. 14. 14 Priorities The right investor The right amount of money for your business The right valuation
  15. 15. 15 Seed Family, Friends and Fools Accelerators Grants $10-50k for 5-10%
  16. 16. 16 Advisory Capital Mentors and supporters Can include vested options for ongoing work or board seats $20-$250k for 10%
  17. 17. 17 Angels Individuals Their own money Flexible – good and bad $250k to $2m for 20%
  18. 18. 18 VC’s Pension funds money 10 Years lifespan Analysts, partners: board seat $2m to $100m for 20%
  19. 19. 19 Capital Raise Path Mick Liubinskas – Flearning - 2014 Start Co-founders 1,000,000 100% Total 1,000,000 Valuation $1
  20. 20. 20 Capital Raise Path Mick Liubinskas – Flearning - 2014 Start Seed Co-founders 1,000,000 100% 1,000,000 91% Seed 100,000 9% Total 1,000,000 1,100,000 1,350,000 1,750,000 2,350,000 Valuation $1 $400,000 $800,000 $2,000,000 $5,000,000
  21. 21. 21 Capital Raise Path Mick Liubinskas – Flearning - 2014 Start Seed Advisory Co-founders 1,000,000 100% 1,000,000 91% 1,000,000 74% Seed 100,000 9% 100,000 7% Advisory 200,000 15% Team options 50,000 4% Total 1,000,000 1,100,000 1,350,000 1,750,000 2,350,000 Valuation $1 $400,000 $800,000 $2,000,000 $5,000,000
  22. 22. 22 Capital Raise Path Mick Liubinskas – Flearning - 2014 Start Seed Advisory Angel Co-founders 1,000,000 100% 1,000,000 91% 1,000,000 74% 1,000,000 57% Seed 100,000 9% 100,000 7% 100,000 6% Advisory 200,000 15% 200,000 11% Team options 50,000 4% 100,000 6% Angel 350,000 20% Total 1,000,000 1,100,000 1,350,000 1,750,000 2,350,000 Valuation $1 $400,000 $800,000 $2,000,000 $5,000,000
  23. 23. 23 Capital Raise Path Mick Liubinskas – Flearning - 2014 Start Seed Advisory Angel Series A Co-founders 1,000,000 100% 1,000,000 91% 1,000,000 74% 1,000,000 57% 1,000,000 43% Seed 100,000 9% 100,000 7% 100,000 6% 100,000 4% Advisory 200,000 15% 200,000 11% 200,000 9% Team options 50,000 4% 100,000 6% 200,000 9% Angel 350,000 20% 350,000 15% Series A 500,000 21% Total 1,000,000 1,100,000 1,350,000 1,750,000 2,350,000 Valuation $1 $400,000 $800,000 $2,000,000 $5,000,000
  24. 24. 24 Terms Terms Terms  Veto rights  Board seats  Liquidation preferences  First rights of refusal  Drags and tags  Super majority, consensus voting  Participation rights  Minority shareholder protection  Communication rights  Tranched
  25. 25. 25 Who sets the terms? If you have multiple investors, you can set the terms. If you have one investor, they set the terms. Mick Liubinskas – Flearning - 2014
  26. 26. 26 Convertible Notes A loan that can become equity Discount rate Interest rate Capped Mick Liubinskas – Flearning - 2014
  27. 27. 27 One day your investors may fire you… Mick Liubinskas – Flearning - 2014
  28. 28. 28 The best cash investment comes from… Customers! Mick Liubinskas – Innes 48 - 2015
  29. 29. 29 Exercise My business will raise $______ From __________ Because __________ For _______ months runway Mick Liubinskas – Innes 48 - 2015
  30. 30. 30 Repetition!!!! Time for some stretching Mick Liubinskas – Innes 48 - 2015
  31. 31. 31 Being Investor Ready Mick Liubinskas – Innes 48 - 2015
  32. 32. 32 Focus Are you ready to get investor ready? Big effort, big distraction. Must be managed. Mick Liubinskas – Innes 48 - 2015
  33. 33. 33 To Be Investor Ready You know what you want You have the story to earn it Relationships are warmed up Mick Liubinskas – Innes 48 - 2015
  34. 34. 34 Why Do Investors Invest? Excitement Support Financial return  30%, 2x, 100x? Mick Liubinskas – Innes 48 - 2015
  35. 35. 35 What do investors choose to invest in? A big opportunity A plan to achieve it A team to execute the plan Mick Liubinskas – Innes 48 - 2015
  36. 36. 36 Risk Vs Reward Mick Liubinskas – Innes 48 - 2015 High Risk Low Risk Low Return High Return Bank interest Seed Corporate Venture Angel
  37. 37. 37 Expansion, not Risk Most angel and all venture Already working Capital to grow it Focus not breadth Mick Liubinskas – Innes 48 - 2015
  38. 38. 38 Investor Ready Maybe we don’t need it… Mick Liubinskas – Innes 48 - 2015
  39. 39. 39 Example Investment Story Customers Cost Time 1st segment $60,000 9 months 2nd segment $25,000 5 months 3-10 $15,000 3 months Mick Liubinskas – Innes 48 - 2015 Raising $250k to launch 10 more segments
  40. 40. 40 Example Investment Story Customers Cost Time 1,000 customers $2.5 each 9 months 10,000 customers $1.25 each 3 months 500,000 customers $1.00 each 3 months Mick Liubinskas – Innes 48 - 2015 Raising $1m to acquire 500,000 more customers
  41. 41. 41 Investment = Sales Attention Interest Desire Action Mick Liubinskas – Innes 48 - 2015
  42. 42. 42 Which Investors Target those that invest in the amount you need in companies like yours. AND adds the value you need. BUT allow for luck Mick Liubinskas – Innes 48 - 2015
  43. 43. 43 Establishing a track record Monthly meetings Create a mailing list network@url.com Email out every 2-3 weeks Mick Liubinskas – Innes 48 - 2015
  44. 44. 44 Example email  Here are 3 good things we’ve done. [We’re moving forward]  We did what we said we’d do last time. [Establish reliability]  Another good person is working with us [Show you are attracting people]  Here is what we’re doing now [Set up the next email]  Here is how you can help. [Show them you expect them to be active] Mick Liubinskas – Innes 48 - 2015
  45. 45. 45 Who Else Is At The Table Let the investor be a part of a good network Mick Liubinskas – Innes 48 - 2015
  46. 46. 46 Investor Pipeline Talk to 10x the money you need Before closing have 3x qualified interest Mick Liubinskas – Innes 48 - 2015
  47. 47. 47 Build Momentum To The Close Who can you close first? Then close the next group Then the next Then a deadline Mick Liubinskas – Innes 48 - 2015
  48. 48. 48 Call, then email  More good things have happened  We have the capital committed  Good people are investing  Attached is the documentation  The bank details are ….  This is the deadline Mick Liubinskas – Innes 48 - 2015
  49. 49. 49 Psychology of Closing  Fear of missing out  This is my chance to get in  Deadline  The first dollar is hardest  Different for VC, but still there Mick Liubinskas – Innes 48 - 2015
  50. 50. 50 Always Be Closing Mick Liubinskas – Innes 48 - 2015
  51. 51. 51 Left Brain Right Brain Mick Liubinskas – Innes 48 - 2015
  52. 52. 52 Pitching Mick Liubinskas – Innes 48 - 2015
  53. 53. 53 One Thing!
  54. 54. 54 This is what I’ll pitch you  Pitching as planning  Your audience  Objective  Momentum  Practice
  55. 55. 55 One Thing!
  56. 56. 56 Pitching As Planning Full story Any holes? Universal Pitch Deck
  57. 57. 57 One Thing!
  58. 58. 58 Objective  Cheque  Next meeting  Introduction  Hire / inspire  PR
  59. 59. 59 One Thing!
  60. 60. 60 Audience Who are they? What do they like? How do they think? How do they want the information?
  61. 61. 61 One Thing!
  62. 62. 62 What to say • Problem – make it big • Solution – make it clear • Market – make it big • Customer – make it clear • Customer acquisition – show it works • Business model – make it simple  Competition and why you are better – show you are aware  Our team – why is this the team to do this  Momentum – show the past, what’s next and where you go  The ask – what do you want  Summary – say the one thing again
  63. 63. 63 What to say • Nothing beats a demo, have a backup • Get empathy, Use stories • Link every slide to the one thing. 80% • 40 point font • Deck to present, deck to send
  64. 64. 64 One Thing!
  65. 65. 65 Momentum We were here Now we are here We are going here 0-10 10-100 100-1,000,000
  66. 66. 66 One Thing!
  67. 67. 67 Practice One hour of practice for one minute of pitching 100 times Stay strong And always remember...
  68. 68. 68 One Thing!
  69. 69. 69 Follow Up Is Key  The next day  Show you listened  Track record of execution  Be specific on what you want  Mailing list  Re-targetting
  70. 70. 70
  71. 71. 71 One Thing!
  72. 72. 72 This is what I just pitched you  Pitching as planning  Your objective  Your audience  Momentum  Follow up  Practice
  73. 73. 73 Startup Science One Thing!
  74. 74. 74 1 Min Pitch Practice Time permitting… Mick Liubinskas – Innes 48 - 2015
  75. 75. 75 Capital Raising Review  Lead it, don’t let it lead you  Have a plan, build momentum  Close with confidence  Pitch one thing  Follow up, follow up, follow up Mick Liubinskas – Innes 48 - 2015
  76. 76. 76 Help Mick Flearn mick@muru-d.com Mick Liubinskas Entrepreneur in Residence at muru-D Co-Founder of Pollenizer Investor at Startmate Mick Liubinskas – Flearning - 2014
  77. 77. 77 What are you going to do in next 24 hours? Mick Liubinskas – Flearning - 2014

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