The document summarizes an entrepreneur's seminar on seed fundraising. The seminar covered sources of early stage investment like friends/family, angels, and seed VCs. It discussed characteristics of different investor types, including typical investment sizes, stages invested in, and expectations. The seminar provided tips on finding the right investors, getting pitch meetings, and communicating effectively in various pitch formats. The goal was to help attendees better understand the seed fundraising process and improve their approaches.

1. To all who attended Wed night at GA: Thanks! Hope you enjoyed it and gained something.
Feedback welcome.
FYI .The next class I will teach at GA is: The Seed Stage Pitch: the Art and Science of
Good Communication Monday 4/15 at 7PM. Link/follow me on LinkedIn and/or Twitter for
updates, etc. (Page 31 of this deck has my details) .Cheers, -TW
Seed Fundraising for Tech Entrepreneurs:
Mastering the Art and the Science
Insights on successful fundraising from an active angel investor
and fellow entrepreneur
General Assembly Seminar
Tom Wisniewski
RosePaul Investments
Wednesday March 13, 2013

2. Agenda
I. Kick-off and Introduction
II. Seed Fundraising
III. Additional Q&A, Feedback and Beverages
September 2011 1
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3. I. Kick-Off and Introduction
Seminar Rationale: Why are we hear?
Based on my experiences and feedback from other investors and entrepreneurs .
Raising money is difficult .especially for early stage ventures.
Why? At least part of the answer is:
• The “market” for early stage investment is complex, nuanced
and can be “bewildering” .especially for 1st timers.
• Finding investors is difficult getting investors to write a check
(can seem) nearly impossible: “1% of start-ups get funded”
• Lots of “noise” no shortage of advice
What will help?
• Understand the marketplace, people and processes that are at
work
• Leverage existing expertise and network (thoughtfully).
• Interpret and utilize the wealth of resources that already exist.
• Improve / adapt your venture and approach.
• ..Become a “student” of the art and science of fundraising (and
entrepreneurship generally)
September 2011 2
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4. What would I like you to walk away with?
Well, this will obviously be different depending on your past experiences and the stage of your venture
but .
Better understanding of the marketplace: fundraising process,
sources of capital, do’s and don’ts, etc.
A set of specific insights that will *change* what you are doing in
fundraising.
A “to-do” list: starting point(s), actions, things to try.
A set of recommended resources to consult and learn more
from.
A few new relationships with others in the NYC start-
up/fundraising ecosystem: fellow entrepreneurs, investors, etc.
Answers to specific questions about fundraising that you might
have.
September 2011 3
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5. Tom Wisniewski: My background
Born in NYC; grew-up in Montclair, NJ
Physics and Philosophy major undergrad
(Clark University); MBA at Tuck School
(Dartmouth)
1st Job: Programmer at Morgan Stanley then
moved to Investment Banking
After B-school: joined a start-up management consulting firm Mitchell Madison
Group; focus on Strategy/Operations/IT for financial services, tech, outsourcing,
private equity/VC clients (1993 to 2000)
Walker Digital: helped set-up and run an early “internet incubator” (2000)
Independent Advisor / Turn-arounds: Advised VC and PE Firms on portfolio
company strategy and new investments; joined the management team of two
companies
Currently:
• Early stage investor and advisor to start-ups
• Investor and advisor to VC and PE funds
• Member and director at New York Angels
Recent Investments: Sociocast (social/behavioral analytics), LiveLook (Saas, live
collaboration, co-browsing); Movio (Digital “RedBox” ); Bizodo (Saas, paperwork
automation); Social Starts (seed fund for start-ups); Brooklyn Bridge Ventures
(Charlie O’Donnell); Entrepreneurs Roundtable Accelerator (ERA)
September 2011 4
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6. Additional Introductions
Ellie Wheller (Greycroft)
Charlie O’Donnell (Brooklyn Bridge Ventures)
Heather Miles (Venture Lawyer Extraordinaire)
Other Guests
September 2011 5
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7. So .what questions do you have about Seed fundraising?
Demitri Source of capital, MVP, stage need to be
Preyas What do I have for a investor discussion
Ranjan level of detail e.g numbers
Shashi .Friend and Family, timeline
Wendy .Best way meet/into to investors
John .how much to Discolose, NDAs
Paul .Persistance and annoying
.where to get details/research, full business case
Darrel .Patents and IP
John .prof/services to product/venture
Pierre .valuation
.See market for Med tech
Shefali .legal structure: angel vs. VC
Lannie Non-tech, how different?
.Accedicated
Bryan .Debt vs. Equity
September 2011 6
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8. II. Seed Fundraising
Sources of Investment: Seed Fundraising, Angels and VC’s
Earlier Stage “Seed” Later Stage
“You” Friends and
aka Bootstrapped Angel Investment Venture Capital
Family
“Seed” VC “Traditional Series A” VC
Round Size $: • $10’s of K • $100’s of K • $500K to • $5M-$15M
to $100K to $1M+ $1.5M
Investment Size $: $5K – $10’s of K • $25K – $75K • $250K-$750K • $3M – $5M
Valuation (Pre- • < $1 M • $1 – 5 M • $5-10 M • $10 – 25 M
Mon):
Stage (Pre-Round): • An idea, initial/rough • Detailed b-plan, • Significant variation among firms
• Expected to b-plan • Key founders (bus & tech) full-time but . Angel req. +:
have: • Initial founders, key • Prototype/alpha done and tested, - Anchor clients on board, revenue
advisors • Some piloting (paying?) growth (B2B),
• Path to ??? customers, some revenues?, - Growing base of users, with strong
• All legal documentation in place, usage trends (B2C)
board of directors - ..Growth potential! Credible
• Path to break-even or next funding path to $100M Rev
• Don’t Expect: • $ Rev, Customers, • Income (e.g. cash flow positive); • Income (e.g. cash flow positive)
Minimum Viable all key management ; completely
Product (MVP); full developed business model (e.g.
legal documentation understand it will change)
Who/what are • People you already • Experienced early stage • Firm with multiple professionals that
they? know, that trust investors (individuals or a group) raises, invests and manages
you, and (maybe) • Accredited Investors. individual funds (other people’s $)
understand your • Angel investing is not their “job”; • Working F/T (this is their job )
venture may not be F/T endeavor • E.g.: Greycroft, RRE, Union Square
September 2011
• E.g.: NY Angels, GoldenSeeds
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9. Who are these “Angels”? What do they look like?
Experienced, successful entrepreneurs: frequently multiple exits
• Some from “tech-start-ups” some from other businesses
• Usually some link to
Successful “corporate” business people: CEO or CxO-types
Older: most are in the 40-60 age group. But there are also notable angels
in their 20’s and 30’s e.g. newly minted start-up millionaires
3 – 10+ Angel Investments
~10% of investible capital in Angel Investments
Differ *widely* in: Industry/Functional Experience, Investment Expience,
Interests, Target Sectors/Stage, Investment $, Risk Tolerance, personal
do’s/don’ts and hot buttons.
Lists? Not many. All are partial. AngelList? Gust? Other?
September 2011 8
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10. Active, NYC Early-Stage Tech Investors
Active VCs in NYC (TW list and opinions) Investment Size by Investor Type
• Lerer Ventures (Seed) • Series A VC: Definitely
• Quotidien Ventures (Seed) >$1M, $3-5 M sweet spot
• RRE Ventures (Seed) • Seed VC: <$1M , $250K-
• First Round (Seed) 750K frequently
• Brooklyn Bridge Ventures (Seed)
• Super Angels / Micro: up
• iNovia Capital (Seed) to $250K? , lots of $25’s –
• Union Square Ventures (Series A & B) 100K’s ?
• Greycroft (Series A & B)
• DFJ Gotham (Series A & B) • Angles: <$100K, typically
$10-50K
• FirstMark Capital
• Village Ventures
Angels, Super Angels, Angel Groups and Micro VCs: [see links
below]
Angel/VC List: https://docs.google.com/spreadsheet/ccc?key=0Ap5XbqUM9nICdG40LXVVamRyN19zZHlTU3E2SmdDTkE#gid=0
.
NYC VC: http://under30ceo.com/top-new-york-based-venture-capitalists-you-should-know/
Angel Groups: https://gust.com/find-investors?keywords=&sort=distance&grouptype=ANGEL_GROUP&region=STATE
September 2011 9
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11. Who are the “right” investors? Where is there a “fit”?
Just do it? Just go pitch some investors? ..Nope. Fit is critical.
• Wrong question: How do I pitch “investors”?
• Right question: Who are the “right” investors? .*then* . How do I pitch this
specific, individual investor?
Reality Check. As a general rule, “people invest in things that they
understand and have experience with”
• Find investors that come from industries, sectors, business models etc. that
are same/similar to your venture and the customer markets it serves.
• If I have never invested in Caribbean real estate, oil wells .or communication
hardware, it is very unlikely that I will do it with you.
• For Angels/Angel Groups: use online bio’s / LinkedIn / AngelList to identify
likely “good fit” Angels
• For VCs: Find the right person at the fund; Individuals at the fund focus on
different sectors. The web site often spells it out.
Thought Exercise:
• “What would the “perfect” investor look like?”
• he/she probably doesn’t exist but this will help you :
- target, prioritize, know one when you see them”
- To be specific (and effective!) when asking for referrals
September 2011 10
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12. How to “get” a pitch meeting?
Find .Fit? Does this investor have “fit”? Do they invest in ventures like mine?
......if not, then move on. (or at least prioritize accordingly)
Prep!
• Know your audience. What have they invested in? Recently? What can you
find out about their background? Interests? Hot buttons?
- How? Duh .Google: Blogs, Quora, YouTube, CrunchBase; talk to
people they know, better talk to those they have invested in.
• Create a good pitch:
- What would they want to know?
- How can I say what’s unique/ compelling
- Make it easy. Think “executive summary” and KISS (Keep It Simple
Stupid)
- adapt pitch to fit the situation.
• Don’t be lazy; invest some time.
Connect. The hard part.
• Avoid “cold-calls”; look for “warm introductions”
• Networking. Who do you know that knows them?
• Find them at an event. (Email sucks!)
Tips on getting a meeting: http://www.quora.com/David-S-Rose-1/How-does-someone-get-a-meeting-with-angel-investor-David-S-Rose
September 2011 11
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13. How to “get” a pitch meeting?
Wrong Question
Right Question:
How do I build a relationship first?
Why?
• Pitching by its very nature can be awkward. “This guy wants
something from me.”
• Having a pitch be the first thing someone hears from you can be
off-putting. “Do I know you?”
• Most investors mean-well, and would like to help but
- they are real busy
- its very challenging to understand new ventures quickly
- Its tough to say “no” (easy to avoid, or say maybe)
Solution: Build a relationship before you need to pitch. OK,
How?
• Give, don’t Ask: what can you do for them?
• “Ask for advice, not money” . Turn people into advisors ..then
investors.
• Debate / Discuss a topic, Ask opinion about X.
• Find ways to “show” rather than “tell”: show me your smart, don’t
September 2011 tell me your smart confidential
12

14. What do I say? How do I say it? Communication is critical.
Why? Potential investors (or potential employees, customers, etc.) usually start
out knowing nothing about you or your venture.
• Getting someone “from 0 to 60 mph” is very challenging: too much to say,
don’t know where to start.
• If you loose someone’s interest in the “first minute” , you usually loose them.
• If you don’t understand someone's “perspective” e.g. expertise (they have 6
Saas investments vs. they can’t spell Saas) you will be ineffective
- People generally understand things by association (to things they know).
- That’s why so many start-up taglines are “XYZ corp is the Uber for the
ABC industry”
Principles. Principles of good communication are the same. Much of the
content will be the same; the format (e.g. pitch deck vs. elevator pitch) and level
of detail will vary by Situation.
• A few principles of effective communication: Audience, Messages, Storyline,
Goals.
• Messages and Storyline will tend to be similar across formats (e.g. deck vs. 1-
pager). However good communication is tailored to the Situation.
• Situation. It’s the Audience, Time Allowed, Relationship, Past
Communication, Goals
• Mostly, level of detail varies.
September 2011 13
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15. Common “Forms” of Pitch Communication. What are they? Which should I use?
“Document” Simplistic Description Common Situation/ Use
1-pager “1 pager Exec Summary, Word • Email attachment or handout
doc” • Online platforms e.g. Gust, AngelList
Email Brief “Teaser paragraph of text / bullets” • “In the intro email” (w/ attachments)
Business Plan “10-40 page Word doc” • Detailed discussions (similar use)
• Stand-alone, due diligence
Pitch Deck “10 page PowerPoint • “15 minute stand-up presentation”
presentation” • Email attachement
Long-Form Pitch “20-40 page version of 10 pager; • “60-90 minute follow-up meeting with
Deck PowerPoint presentation” smaller group”
Elevator Pitch “No document, just you talking for • Your quick intro after you meet
60 seconds” someone in person
“Video” Pitch “10 minute video of your deck/ • Email attachment
demo w/ you voice” • Online platforms e.g. Gust, AngelList
Due Diligence Docs “All the detailed spreadsheets, • For detailed discussions with
data, etc. that back-up your pitch” interested investors, usually post-
e.g. Financial Projections, Sales term-sheet
Funnel, Legal Docs • Online platforms e.g. Gust, AngelList
The Good News:
• you don’t need to have all of them (maybe ever, certainly 1 or 2 to start is fine)
• much of the content, messages, storylines can be shared and reused
September 2011 Preparing thoughtful docs
• refines your thinking and your venture. 14
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16. Good Pitch Deck
From “Triple Play” of VC Presentations by Adapted from “10 Slides to an Awesome
Mark Suster (former entrepreneur, now VC) Pitch” by Dave McClure, 500 Start-Ups
Slide 1 – Team Bio 1. Elevator Pitch
Slide 2 – 50k foot view of your company 2. The Problem
Slide 3 – Problem Definition 3. Your Solution (Demo Here!)
Slide 4 – How do you solve the problem? 4. Market Size
Demo Web Version and 5. Business Model ($)
a Demo Video Example 6. Proprietary Tech
Slide 5 – Market Sizing 7. Competition
Slide 5 warning: (Market Sizing Pitfalls) 8. Marketing Plan
Slide 6 – Competition 9. Team / Hires
Slide 7 – Customer Adoption / Traction 10. Money / Milestones
Slide 8 – Team
Slide 9 – Financial projections
Slide 10 – Use of Proceeds
Slide 11 – Fund raising process / Next steps
Appendix – Back-up slides
How to deal with the dreaded question of
valuation? http://www.slideshare.net/dmc500h
ats/how-to-pitch-a-vc-sept-2010
http://www.bothsidesofthetable.com/pitching-a-vc/
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17. What does a successful investor pitch meeting look
like?
From “Triple Play” of VC Presentations by Mark Suster
Act I: Discussion. The warm-up. Share. Listen. Build rapport.
Act II: Pitch
Act III: Demo
This one opinion. One order of things. Everything varies by Situation (e.g. Audience). You will
adapt based on your presentation “style” and comfort level.
http://www.bothsidesofthetable.com/2009/09/12/do-you-need-a-powerpoint-deck-for-a-vc-meeting/
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18. What do investors care about? What do the want to
see?
My (TW) List for What do VC’s want? By Many, many others
Evaluation Sheetal Shah
• Elements of the B-
1) Market • Big Opportunities / Big Plan
Opportunity Visions • Lots of personal
2) Product • Idea/Founder preference
3) Traction Authenticity
4) Team • Founder Profile:
Missionary Passion,
Balanced Ego, Trust
• Objectivity
• A-Teams
http://upstart.bizjournals.com/resources/author/2012/07/19/what-do-venture-capitalists-want.html?page=all
September 2011 17
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19. Angel Groups: How do they differ?
Member Profile: What does the “typical” member look like? What industries, sectors,
companies do they come from?
Sector Focus. What types of companies are they investing in?
• Internet, software (vs. Hardware vs. Pharma / Bio-tech vs. Clean/Green-tech)
• B2C vs. B2B, Saas, Cloud-based, Content-based
• How does their Portfolio compare to their stated strategy?
• What is their “sweet spot”? Vs. their “also do”?
Stage. What is the target “stage” for prospective investments? What completed
milestones and characteristics are they looking to see?
• Revenues vs. Pre-Revenue? Product/Tech development? MVP complete?
• Customer/market validation? Anchor accounts? User levels?
Valuations/ Investment Size: Pre-Money valuation range and size initial investment
• “We typically invest $200 – 500K at valuations in the $1-3 Million level.”
Group Structure / Investment Decisions. How is the Angel Group structured? Most
importantly, how are investment decisions made? Who makes them?
• Network: Angel Group runs the process, individuals make independent “opt in”
decisions to invest on a deal-by-deal basis.
• Democratic: Angels commit $ to the group, $ decisions are made based on voting
• Fund structure: Angels commit $ to the group, and an “investment committee” makes
all/most funding decisions. Additional Opt-in co-investments available.
September 2011 18
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20. NY Angels Profile
www.newyorkangels.com
Member Profile: ~80 investor/members; several early-stage funds; Member
backgrounds are generally representative of the tech / entrepreneurs / industries in NYC:
software, e-commerce, ad-tech, finance, media
Sector Focus: Internet, e-commerce, new-media, software; B2C and B2B. Mostly NYC
Area.
Stage. Mostly early stage (with some customers/revs), some seed stage (pre-revenue)
Valuations/ Investment Size: NYA pre-money valuations tend to range from $1M – 4M;
investments tend to range from $250K to $1M+;
• For larger rounds, NYA often leads the deal and helps find the rest of the capital by
sharing/syndicating the deal with other Angel Groups
Group Structure / Investment Decisions. NYA core structure is as a group of individual
investors. Individual investors “opt in” to deals and make their own investment decisions.
• Typical member invests $25-50K in a deal.
• In addition to the core “opt-in” model, NYA has just closed a small seed fund that will
operate in parallel (using a “democratic model” for investment decisions)
History/Background. NYA has invested $45M+ in 70+ companies.
• We are very active in the NYC entrepreneurial / early-stage ecosystem
September 2011 19
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21. A “Typical” Angel Group Process for Entrepreneurs
1. Find the right group(s) to pitch What is typical success
rate for funding?
2. Apply online • Industry data for angel
groups and VCs:
3. Get invited to screening 0.5% - 2% of
companies submitting
4. Meet with screening panel b-plans get funded
What can increase the
5. Get invited to present
speed and success
rate?
6. Present to full group(s) • Member referral
• Investor referral
7. Get invited to due diligence session • Lead Investor /Term
Sheet
8. Deep dive w/ interested investors • Have good pitch and
due diligence docs
9. Get presented a draft term sheet • Well practiced,
thoughtful pitch
10. Negotiate the term sheet
September 2011 20
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22. Variations on the Theme: Other Players
“Super Angel” (vs. Angels, Angel Groups). Sophisticated angel investor with a large portfolio
of early stage investments (30? 50?) and that is investing frequently (10 + per year). E.g. David
Rose, Fabrice Grinda
Microfund or Micro VC Fund. Small VC fund ($1-10 M) often run by a single person typically
making “angel” size investments in early stage companies.
Seed Fund. VC fund focused on “seed” (aka Angel) stage investments: often pre-revenue,
pre-product. Some VC’s that typically invest in “Series A” rounds will reserve a portion of their
fund for seed investments: e.g. $250 – 750K investments at $1-5 Million valuations
Incubator/Accelerator. Entity that provides non-monetary support/services (in addition to $’s)
to early stage ventures. Typical support/services can include: space, IT infrastructure, shared
admin service, advice/feedback, introductions/networking. Public vs. private, independent vs.
captive. Examples: TechStars, ER Accelerator, DreamIT, Y-Combinator
Strategic Partner/Investor. Some operating companies will invest in ventures. Typically it is
in an industry/ sector / product-space similar to theirs (sometime with an eye toward potential
acquisition in the future)
Crowd Funding Platforms. Currently this is financing via donation or “pre-sale” of products.
Equity financing under JOBS Act is TBD. Not obvious this will be a good match for most Tech
AngelList. Similar to an angel group, but without centralized control. More of a open
“marketplace” of individual investors and ventures to facilitate funding.
Gust. Software platform that most angel groups utilize (and many small VC’s) to run their
investment process and connect angel groups together to share deals.
September 2011 21
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23. Legal Primer for Start-ups: What’s Important?
The 5 W's + 1H of Formation - When to form (timing/tax issues? What
to form (choice of entity)? Where to form (choice if jurisdiction?) Why to
form (tax and legal issues)? Who to form with (co-founder equity and
vesting)? How to Form (DIY v. lawyer)
IP 101 - Overview of intellectual property law:
• Government filings and timing (Trademark, Patents)
• Contractual IP law (PIIAs, licensing agreements)
Advisory board 101s - How important, what is appropriate
compensation - I find most companies think the advisory board is more
important than it is. I also have found an increase in charlatan
"advisors" who ask for a lot of equity and have NO connection to the
VC world or have any value to add.
Deal terms - Debt v. Equity.
• Debt - How notes work and what terms matter (valuation and cap)?
• Equity - Common v. Preferred Stock features. Board structure.
Source: Heather Miles heather@hmileslaw.com
September 2011 22
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24. Investor Perspective: Notes vs. Preferred Equity
This is really the subject of a separate dedicated class. That said .
History. Preferred Equity is standard for both Angel/Seed and VC (Series A, B, etc.).
Convertible Notes were used as a “bridge” to a [reasonably well defined, high probability]
upcoming financing.
• Now: Convertible Debt much more popular at Angel/Seed round
Preferred Equity. Equity (stock) that has defined “preferences” over common stock.
• Establishes a value for the company e.g. [$3.5M] pre-money valuation
• Liquidation Preferences. Most commonly used is “non-participating preferred” aka
“straight preferred”. E.g. a [1x] liquidation preference. Means investors get their invested
money back plus [1x] before common equity holders. In the event of success, everyone
converts to common and shares pari passu. Liquidation preference is really downside
protection for investors
• Investor rights. E.g. approval of key company decisions
Convertible Note. Debt that converts to equity when a next financing round occurs. As
Debt, typically: carries interest rate (e.g. 8%); has preference to all equity: gets paid back
1st; secured by assets of company
• Converts to equity at “same terms” as next round ..except the Note usually has
- Discount [10-30%] to the valuation (in the next round)
- Cap on valuation (in the next round); means “valuation not to exceed $__”.
• Terms of conversion
- Upon “qualified financing”, e.g. financing of a least [$2M]
- End of the Note’s term [18 months]
- At the option of investors
Other Key Terms. Employee option pool, board composition, dividends, anti-dilution
provisions, pro-rata investment rights, capped legal expenses.
Source: NY Angels Educational Meetup
September 2011 23
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25. Key Success Factors and Take-Away’s
for attracting Seed Investment
Pitch, Get Feedback, Revise. Repeat. No venture idea was built in a
vacuum. The ONLY way to develop business ideas is to share them, solicit
feedback, make adjustments, develop/refine/add and ..DO IT AGAIN!
• Many ventures fail to gain investor attention because there are too many gaps
(perceived and real).
Find Good Advisors. To get good, detailed feedback and input you need to be
talking to right people, with the right experiences: Experienced entrepreneurs
and investors, prospective clients and partners.
• Networking, networking, networking .
Communication is Paramount. Potential investors (or potential employees,
customers, etc.) usually start out knowing nothing about you or you venture.
Getting someone up to speed: a challenge. Getting someone to write a check:
a big challenge. At the core is effective communication.
September 2011 24
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26. Key Success Factors and Advice .continued
Find Investors that Fit. People invest in things that they know, understand,
have experience with. Find ones that match. [see previous pages]
Find “Lead” Investor(s). Its critical to get one or more investors on board
who can take the lead in driving the investment process: due diligence, term
sheet, investor commitments, closing documents/process
• Investors trust ..other investors. Their interests are aligned. Lead
investors help attract additional “followers”. With Angel Groups: use available
bios / LinkedIn to
Understand (and Manage) the Process. You are more likely to succeed if you
really understand what’s happening (or should be happening) For each step
(e.g. investor search, screening, presentation, due diligence, term sheets, etc.):
• What is happening or needs to?
• Why? What’s the rationale?
• Who is doing what? How do perspectives and motivations differ?
• now, what can I do to make it work for me?
September 2011 25
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27. Key Success Factors and Advice .continued
Valuation (and Key Terms). Be realistic. Be Flexible. Realize this is a
professional (not personal) discussion ; there will be back and forth. Ultimately
the “market” sets the price/terms.
• There is more to investment terms than valuation .Important to understand.
Timing. Am I ready for Angel Investment?......A few probing questions:
• Have you covered the key success factors mentioned here? Do you have a
compiling business opportunity with huge growth potential?
• Do you really need the money? Now? The more that you can accomplish on
your own, the more compelling your case (and valuation) will be ..
• Are you ready to work for a someone else? e.g. the investors, the board of
directors
• Fund raising is “brain damage”. It wastes valuable time that could be spent
growing the business. Avoid it, minimize it, delay it if you can.
September 2011 26
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28. What would I like you to walk away with?
Well, this will obviously be different depending on your past experiences and the stage of your venture
but .
Better understanding of the marketplace: fundraising process,
sources of capital, do’s and don’ts, etc.
A set of specific insights that will *change* what you are doing in
fundraising.
A “to-do” list: starting point(s), actions, things to try.
A set of recommended resources to consult and learn more
from.
A few new relationships with others in the NYC start-
up/fundraising ecosystem: fellow entrepreneurs, investors, etc.
Answers to specific questions about fundraising that you might
have.
September 2011 27
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29. Other Classes
• TW Follow-on classes:
• The Seed Stage Pitch: the Art and Science of
Communication Monday 4/15 at 7PM
• Introduction to VCs: A Primer for Entrepreneurs
[Timing TBD]
• Start-up Strategy: Marrying Effective Strategic
Thinking to the Real World of Early-Stage Tech
[Timing TBD]
• Other GA Classes
• Essentials of Start-up Law (Course by WSGR) ??
September 2011 28
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30. III. Additional Q&A, Feedback and Beverages
Feedback on this class:
What did you like most about this seminar?
What could be added and improved to make it better?
What other topics would you like to see a seminar conducted on ?
September 2011 29
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31. Thanks!
Thomas Wisniewski
Contact Info
Email: twisniewski@newyorkangels.com
LinkedIn: http://www.linkedin.com/in/thomaswis
Twitter: @thomaswis
This presentation: http://www.slideshare.net/Thomaswis/
New York Angels www.newyorkangels.com
New York Angels Educational Meetup: http://www.meetup.com/NY-Angels/
Heather Miles (start-up lawyer) heather@hmileslaw.com
September 2011 30
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32. Additional Slides
September 2011 31
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33. Another view of the funding “marketplace” .
$100M
IPO
Strategic Partners
$10M
Venture Capital
$1M Banks
Angel Groups
SBIR/STTRGrants
Gov /State Grants
$100K
Friends, Family
& Fools Angel Investors
Source: Idea Plan Prototype Beta Sales Profitability
Tom Stephenson, Verge
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34. Deal Volume and Stage: VC’s vs. Angels
Late VC
Mostly later stage
3,400 deals
$0.5-1.0B per
Year
Angels
49,000 deals
Mostly early-stage
Early
$20B per Year
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35. Other Definitions for . VC’s vs. Angels
Venture Capitalists
“Professional fund managers who invest
large pools of other people’s money for an
economic return.”
Angel Investors
“Rich(-ish) people who invest their own
money for economic and other reasons.”
Non-$ Value added: “Many entrepreneurs
have expressed to me that the value of the
time that angels invest .exceeds the value
Source:
of their money”
David Rose, Bill Payne
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36. Average Profile of an Angel
Age 57 9 years investing
Masters degree 10 investments
15 year entrepreneur 2 exits/closures so far
2.7 ventures founded 10% of wealth in angel
investments
Also worth noting ..within the “average” there are “newly minted”
angels: entrepreneurs post sale of their company/ IPO.
“Accredited Investor” (SEC definition)
$1 million in assets (not including home) or
$200,000 annual income in past two years
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37. Annual Sources of Start-up Funding
$22
Venture Capital ~$.3 billion $20
$18
State Funds ~$.5 billion $16
Angel Investors ~$20 billion $14
$12
$10
$8
Angels: 90% of outside $6
equity for start-ups? $4
$2
$0 1
Friends & Family ~$60 billion
Sources: MoneyTree, NASVF, multiple studies on informal capital
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38. New Company Formation
Source of Equity Funds – Typical Year
500 Classic VCs
1000-2000 Seed Funds
>50,000 Angels
>200,000 Friends & Family
500,000 Startup Companies
0 100,000 200,000 300,000 400,000 500,000
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39. Companies Backed by American Angels
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40. Average = 43.6
Investors Per Group Median = 32.5
30
25
20
15
10
5
0
2 to 10 11 to 25 26 to 50 51 to 75 76 to 100 101+
Percent of Groups
Source: 2009 ACA Confidence Survey and 2008 Member Directory
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41. Average Preferred Investment Per Round - 2008
< $150,000
$150,000 - $250,000
$250,000 - $500,000
$500,000 - $750,000
> $750,000
0 10 20 30 40 50
Percent of
Source: 2009 ACA Angel Group Confidence Survey and 2008 Member Directory Groups
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42. Growth in Number of American Angel Groups Likely Drivers (the
300 Benefits of Angel
Groups)
250
• Shared expertise
in:
200 • Angel investing
• Companies /
150 sectors
• Bus. functions
100 (IT, Sales, Fin)
• Scale (more
50 investment $)
• Deal flow (quality
0 and quantity)
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Sources: Center for Venture Research (pre 03 data) and Kauffman Foundation/ACEF (04-09 data)
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43. Additional Thoughts ..
Lots of start-up advice out there. Lots about the art of fundraising.
• Huge volume of blogs, articles, Quora-posts, etc.
• Well .that’s good, right? Yes.
• But why doesn’t it help?
- Overwhelming
- Conflicting
- Not specific
- Not enough context
- It’s just advice, ideas, ..not interactive, not experience.
• Need to understand the “why” behind it all and adapt it to your venture, your situation.
Beware of simple answers, absolutes. As you are reading and listening to all these
opinions, data sources
• For any “fact” “rule” “truth” if you don’t understand how it is both true/false, you don’t
really understand the point.
- Under what circumstances is this “rule for fundraising” “true”? Where does it apply
well With whom?
- How and when is it not true (Or less true)?
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