This document discusses the challenges of raising a Series A round of funding. It notes that while seed funding is relatively easy to obtain, Series A funding is much more difficult due to increased competition and higher investor expectations. Investors are looking for strong metrics, validation, team, and large, sustainable businesses. They invest in areas they are familiar with and look for companies demonstrating exponential growth. While raising a Series A is challenging, companies with great execution, traction, and teams that meet new, higher criteria can still obtain funding.

1. Series
“A”
Funding
David
Nault
@venturebuilder
david@iNovia.vc

2. Agenda
1. The
Good
2. The
BAD
3. The
UGLY
…of
raising
your
next
round.

3. Agenda
v.2.0
1. The
UGLY
Series
A
crunch
2. The
BAD
New
criteria
for
series
A
3. The
Good
Good
businesses
get
funded
…of
raising
your
next
round…

4. Why
is
RAISING
MONEY
so
F@#%
HARD
!

5. Increased
number
of
startups
$

6. 2012
400*
2011
280
2010
220
Canadian
seed
deals
Seed
=
<$1.5M
*
esPmated

7. 20%
will
successfully
raise
series
A

8. Data
shows:
Series
A
Crunch

9. For
the
opRmisRc…..
There’s
no
CRUNCH
It’s
just
easier
to
raise
seed
&
harder
to
raise
later
rounds

10. Inside
scoop
on
Venture
Capital

11. 80%
of
returns
from
VC
come
from
5%
of
funds

12. VENTURE
MATH
101
Fund
Size
$100M
Life
of
fund
10
years
Return
promised
to
LPs
20%
Return
needed
$300M
Average
ownership
in
companies
15%
Aggregate
Exits
needed
$2B
It’s
crazy
hard
to
make
$
in
VC!
See:
StartupCFO’s
blog

13. VCs
need
businesses
that
can
be
HUGE

14. “Not
every
business
Is
fundable
at
every
moment
in
Rme”
Don’t
Blame
the
System
David
Crow’s
blog

15. 2-­‐
The
BAD…
10M
is
the
new
10
M
users
hXp://cdixon.org/2012/08/03/ten-­‐million-­‐
is-­‐the-­‐new-­‐one-­‐million/

16.  Metrics
 ValidaRon
 Team
 Great
business/
Model

17. VCs
trust
metrics

18. Show
operaEonally
you
are
metrics
driven
Know
your
#’s
by
heart
!

19. Demonstrate
growth
of
key
metrics
Time
is
your
enemy

20.
VCs
love
LARGE in
magnitude
1000’s….Million…. 10’s
of
million
!

21. Risk
miEgaEon
&
solid
business
model

22. The
GOOD
!
GeUng
a
deal
done

23. GREAT
businesses
get
funded.

24. GeUng
a
Deal
Done
What
VC’s
look
for?
 The
3
T’s
-­‐
Team,
TracPon,
Technology
 Familiar
market
–
do
your
homework
!
 Sustainable
business
model
 Great
co-­‐investor
syndicate

25. GeUng
a
Deal
Done
The
3
T’s
-­‐
Team:
 Strong
domain
knowledge
 Great
track
record
 Addressable
holes
in
the
team
(if
any)
“Awesome”
Team

26. GeUng
a
Deal
Done
The
3
T’s
-­‐
TracPon:
 TracPon
shows
there’s
a
market
 TracPon
shows
team
can
execute
 3
forms
of
tracPon:
-­‐ Sales,
audience,
partners
TracPon
is
validaPon

27. GeUng
a
Deal
Done
Tech/
CompePPve
Advantage:
• Why
are
you
beXer
?
• What
do
you
have
that
they
don’t?
• Is
there
a
barrier
to
entry?

28. GeUng
a
Deal
Done
VCs
invest
in
familiar
markets
 Do
your
homework
 Know
the
partner’s
backgrounds
 Know
all
their
investments
 Show
there’s
a
fit
?
Due
diligence
goes
BOTH
ways
!

29. 3
things
to
take
home
1. It’s
F@#$
hard
to
raise
money
2. Great
businesses
get
funded
3. Team,
tracPon,
execuPon
Good
VCs
are
already
tracking
your
progress

30. David
Nault
@venturebuilder
david@inovia.vc