TCW/Craton is a $135.5 billion private equity firm that invests in technology and sustainability companies. It looks for teams with experience, proven track records, technologies that solve problems, and opportunities for strategic collaboration. As starting a business has become more affordable and common, there are now more investment opportunities than ever before in highly competitive early-stage markets. This requires startups to be more capital efficient and further developed with metrics like user growth and revenue from an earlier stage.

1. Intro to Fundraising
Tom Soto
Managing Partner
TCW/Craton

2. A bit of TCW background
• Established in 1971 in Los Angeles, California
• $135.5 billion in assets under management
• Approximately 1,100 institutional and private clients
TCW/Craton is a private equity platform focused on growth investments in
technology and/or technology-enabled service companies that promote
sustainability and/or social responsibility

3. What we look for
• Team with experience and domain expertise
• Proven and visible track record
• Technology that solves a problem
• Environmental benefit and/or social impact
• Carbon reduction, resource conservation, social
mobility
• Opportunities where we can add strategic value
• Regulatory expertise, capital strategies, business
development

4. Trends impacting early stage investing
• The costs of starting a business have declined
• Startups have become commonplace
As a result, there are more startups and investment
opportunities today than ever before.
• Competition is fierce, but rewards are greater

5. What are the implications?
• Startups are more capital efficient, requiring less
investment
• Startups are further developed at an earlier stage with
significant user growth, activity, retention and
revenue
• Investment decisions based on results instead of
perceived opportunity
• Startup founders now often have more leverage than
investors

6. Early stage investments are increasing
Silicon Valley Financing Deal Share
By Stage, 2009 – Q3 2013
Source: CB Insights

7. Small business is critical to economy
• SBA defines small business as an enterprise having
fewer than 500 employees
• 28 million small businesses in the US
• Over 50% of the working population works in a small
business
• Small businesses have generated over 65% of net
new jobs since 1995
• Approximately 543,000 new business get started
each month – but more employer shutdown than
startup
Source: U.S. Small Business Administration

8. Some DOs and DON’Ts
• DOs:
– Know your audience – no one is impressed by hoodies
– Keep presentations simple and concise – NO 40 page PowerPoint
– Send materials in advance to accelerate discussion
– Backup assertions with quantitative results – footnotes & appendices
– Demonstrate domain and market expertise
– Track and understand key metrics at granular level
• DON’Ts:
– Cold call investors – network, conferences, social media
– Accept just anyone’s money – must have strategic value add
– Say and/or believe there is no competition – there is always competition
– Get hung up on valuation - big slice of small pie vs. small slice of big pie
– Be unrealistic with market expectations and international opportunity

9. Appendix: Investor deck outline
1. Concise overview
2. Problem / opportunity
3. Value proposition – competitive advantages
4. Product demonstration
5. Sales & marketing – go to market strategy
6. Competitive landscape
7. Business model
8. Financial forecast
9. Team – domain expertise
10. Status & milestones