Capital raising guide plus pitching bonus

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The Adventure of
Capital Raising
Mick Liubinskas
muru-D, Pollenizer, Startmate
2015

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Did you remember any of
those?
Which made you want to follow
up?
Did you understand it?

4
My Mission Today
Every single person,
Action one of these ideas,
In the next 24 hours

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This Workshop
Practical
Interrupt
Be a case study
Mick Liubinskas – Innes 48 - 2015

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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

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Who is in the room
Who wants to capital raise?
Why?

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About Capital Raising
Avoid the hype
Business, not a startup
Hard to learn and to do
But it is learnable

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Before You Start
Think about it
Get advice
Think about it some more
Take it seriously

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You Are Finding An Investor
Not someone to give you
money
Partner
10x

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Priorities
The right investor
The right amount of money for
your business
The right valuation

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Seed
Family, Friends and Fools
Accelerators
Grants
$10-50k for 5-10%

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Advisory Capital
Mentors and supporters
Can include vested options for
ongoing work or board seats
$20-$250k for 10%

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Angels
Individuals
Their own money
Flexible – good and bad
$250k to $2m for 20%

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VC’s
Pension funds money
10 Years lifespan
Analysts, partners: board seat
$2m to $100m for 20%

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Capital Raise Path
Mick Liubinskas – Flearning - 2014
Start
Co-founders 1,000,000 100%
Total 1,000,000
Valuation $1

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Capital Raise Path
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

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Capital Raise Path
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

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Capital Raise Path
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

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Capital Raise Path
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

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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

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Who sets the terms?
If you have multiple investors,
you can set the terms.
If you have one investor, they
set the terms.

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Convertible Notes
A loan that can become equity
Discount rate
Interest rate
Capped

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One day your investors
may fire you…

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The best cash
investment comes
from…
Customers!

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Exercise
My business will raise $______
From __________
Because __________
For _______ months runway

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Repetition!!!!
Time for some stretching

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Being Investor Ready

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Focus
Are you ready to get investor
ready?
Big effort, big distraction.
Must be managed.

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To Be Investor Ready
You know what you want
You have the story to earn it
Relationships are warmed up

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Why Do Investors Invest?
Excitement
Support
Financial return
 30%, 2x, 100x?

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What do investors choose
to invest in?
A big opportunity
A plan to achieve it
A team to execute the plan

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Risk Vs Reward
High Risk
Low Risk
Low Return High Return
Bank
interest
Seed
Corporate
Venture
Angel

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Expansion, not Risk
Most angel and all venture
Already working
Capital to grow it
Focus not breadth

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Investor Ready
Maybe we don’t need it…

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Example Investment Story
Customers Cost Time
1st segment $60,000 9 months
2nd segment $25,000 5 months
3-10 $15,000 3 months
Raising $250k to launch 10 more segments

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Example Investment Story
Customers Cost Time
1,000 customers $2.5 each 9 months
Raising $1m to acquire 500,000 more customers

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Investment = Sales
Attention
Interest
Desire
Action

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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

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Establishing a track record
Monthly meetings
Create a mailing list
network@url.com
Email out every 2-3 weeks

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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]

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Who Else Is At The Table
Let the investor be a part of a
good network

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Investor Pipeline
Talk to 10x the money you
need
Before closing have 3x
qualified interest

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Build Momentum To The Close
Who can you close first?
Then close the next group
Then the next
Then a deadline

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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

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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

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Always Be Closing

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Left Brain
Right Brain

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Pitching

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This is what I’ll pitch you
 Pitching as planning
 Your audience
 Objective
 Momentum
 Practice

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Pitching As Planning
Full story
Any holes?
Universal Pitch Deck

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Objective
 Cheque
 Next meeting
 Introduction
 Hire / inspire
 PR

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Audience
Who are they?
What do they like?
How do they think?
How do they want the
information?

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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

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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

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Momentum
We were here Now we are here
We are going
here
0-10 10-100 100-1,000,000

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Practice
One hour of practice for one
minute of pitching
100 times
Stay strong
And always remember...

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Follow Up Is Key
 The next day
 Show you listened
 Track record of execution
 Be specific on what you want
 Mailing list
 Re-targetting

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This is what I just pitched you
 Pitching as planning
 Your objective
 Your audience
 Momentum
 Follow up
 Practice

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1 Min Pitch Practice
Time permitting…

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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

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Help Mick Flearn
mick@muru-d.com
Mick Liubinskas
Entrepreneur in Residence at
muru-D
Co-Founder of Pollenizer
Investor at Startmate

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What are you going to
do in next 24 hours?

Capital raising guide plus pitching bonus

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