All Rights Reserved - IEA 2013
FundRaising
101
@malayeri
Tuesday, May 6, 14

All Rights Reserved - IEA 2013
Resource
Check
out
www.karya.ir
for
more
on
fundraising
in
Farsi
Venture
Deals
Great
Book
by
Brad
Feld
and
Jason
Mendelson
Tuesday, May 6, 14

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Players
•
Entrepreneur
•
Venture
Capital
•
Angel
Investor
•
The
Lawyer
•
The
Mentor
Tuesday, May 6, 14

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Stages
•
Seed
Stage
•
Early
Stage
✴
Series
A
✴
Series
B
•
Mid
Stage
✴
Series
C
✴
Series
D
•
Late
Stage
✴
Series
E
✴
Series
F
•
EXIT
(IPO
-­‐
M&A)
Tuesday, May 6, 14

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Team
...
Tuesday, May 6, 14

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Team
...
They
invest
in
teams
not
ideas!
It
is
all
about
your
team
...
Vision
+
Commitment
(NOT
INVOLVEMENT)
Where
to
find
your
ideal
team?
School?
MBA?
StartupWeekend?
Create
your
Minimum
Viable
Team
(MVT)
Tuesday, May 6, 14

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Size
Ma7ers!
Tuesday, May 6, 14

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Size
Ma7ers!
How
many
members?
1:
Slow
-­‐
Lonely
2:
Magic!
1
builds,
1
sells
3:
great
customer
development
team
4:
Crazy!
5:
WHAT??!
Investors
care
about
your
background
Tuesday, May 6, 14

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What
else?
Tuesday, May 6, 14

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What
else?
They
want
to
know
about
your
advisors
You
need:
MENTORS
COACHES
ADVISORS
GOD
FATHERS
FRIENDS
NETWORK
CUSTOMERS
Tuesday, May 6, 14

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Types
...
Tuesday, May 6, 14

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Types
...
Smart
Money
vs.
Dumb
Money
(Hands-­‐off
Investors)
Types
of
Investors:
•
FFF:
Family,
Friend,
Fool
•
Angels:
Usually
successful
entrepreneurs
who
are
inves]ng
their
own
money
from
the
industry
they
profited
from
to
startups
as
seed
inves]ng.
•
VC:
Venture
capital
is
the
funding
resul]ng
from
professional
managers
inves]ng
other
people’s
money
in
startups
and
early-­‐stage
companies
in
order
to
generate
high
rates
of
return.
Tuesday, May 6, 14

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Angel
vs.
VC
Tuesday, May 6, 14

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Angel
vs.
VC
Angel VC
Less
Money More
Money
For
Fun For
Profit
Quick Slow
(~12months)
No
Control Lots
of
Control
Don’t
ask
for
NDA
from
your
investor
Tuesday, May 6, 14

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Fundraising
Material
Tuesday, May 6, 14

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Fundraising
Material
•
ExecuLve
Summary
•PresentaLon
Deck
•
Demo
/
Prototype
(More
important
than
BizPlan)
•
Business
Plan
(Trend
is
changing
but
s]ll
valuable)
•
Financial
Model
(The
earlier
stage
the
startup,
the
less
accurate
any
predic]on)
(Revenue
Forecast,
Monthly
Burn
Rate)
•
Due
Diligence
Materials
Tuesday, May 6, 14

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Investor
Pitch
...
Tuesday, May 6, 14

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Investor
Pitch
...
Tell
Your
Story
Momentum
-­‐
Vision
-­‐
Team
Gain
trust
in
your
team
-­‐
product
-­‐
market
Don’t
over
sell
(or
sell
too
hard)
Tuesday, May 6, 14

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There are only a few key things most VCs
look at to understand and get excited
about a deal:
• the problem you are solving,
• the size of the opportunity,
• the strength of the team,
• the level of competition or
competitive advantage that you
have,
• your plan of attack,
• and current status.
Tuesday, May 6, 14

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Pitch
Deck...
Tuesday, May 6, 14

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Pitch
Deck...
Elevator
Pitch
Problem
Solu]on
Market
Size
Business
Model
Compe]]on
Go-­‐to-­‐Market
Strategy
Team
/
Hire
Money
/
Milestone
Tuesday, May 6, 14

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Tuesday, May 6, 14

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ValuaLon
...
Tuesday, May 6, 14

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ValuaLon
...
Investment
is
about
how
much
you
need
Startup
valuaLon
is
an
art
You
need
validated
business
model
with
trac]on
not
Business
Plan
Post
Money
VS.
Pre
Money
Valua]on
Tuesday, May 6, 14

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create a dog race to increase valuation
Tuesday, May 6, 14

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Note!
•
It
is
a
long
term
process!
Be
Pa]ent
specially
if
dealing
with
VC
•
Get
ready
for
at
least
5
years
of
commitment!
Tuesday, May 6, 14

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Simple
Terms
in
Terms
Sheets
•
Control
Terms
✴
Board
of
Director
•
Other
Terms
✴
Dividends
✴
First
Right
of
Refusal
✴Employee
Op]on
ISOP
Tuesday, May 6, 14

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Simple
Terms
in
Terms
Sheets
•
Economic
Terms
✴
Price
(Valua]on
-­‐
Post
Money,
Pre
Money)
✴
Ves]ng
✴
An]-­‐Dilu]on
•
Control
Terms
✴
Board
of
Director
•
Other
Terms
✴
Dividends
✴
First
Right
of
Refusal
✴Employee
Op]on
ISOP
Tuesday, May 6, 14

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QuesLons?
Tuesday, May 6, 14