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How to raise money for your first startup business
- 1. How to raise money
for your first start-up business
Peter Cheng | 程 勇
http://cn.linkedin.com/in/petercheng
© 2010 C2IVC
- 2. Agenda
Is right time for Start-ups?
How much do you really need for a Startup?
Raise money, alternative way
Get things done , Strategy to Action
2 © 2010 C2IVC
- 5. Today is So Yesterday
NASDAQ
China Stock A
The Gartner Hype Cycle
© 2010 C2IVC
- 8. Content vs Context vs Timing
• Right idea in the wrong place (JFox)
• Right idea, right place wrong timing (Yes PPG)
• Right idea, right place, right timing…but Wrong
team (Xiaonei)
天时 地利 人和
© 2010 C2IVC
- 9. How much do you need?
• Project how much money you need for one
year
• Add a 30% buffer
• Fundraising will take 6-9 months. (current
climate 9-12+ months)
• Angel (seed) or venture capital (Series A)
Beijing RMB 50,000 ~ 100,000 Start-up
© 2010 C2IVC
- 10. Who is your ideal investor?
• Capital needs dictate investor type
• ✓ Micro-seed capital. < RMB 100,000
(i.e.TechStars, friends & family, savings,
Visa/Mastercard)
• ✓ Seed capital. RMB 100,000 - 2 million
(angels/angel funds. i.e 雷军)
• ✓ Series A round. RMB 2 – 10+ million (i.e.
north light vc)
• ✓ Smart money is best. At some point you
need money in.
© 2010 C2IVC
- 11. Make your company investment ready
• Get Things in Order
» Vision -- What we do
» Strategy -- How we do it
» Action – Get things done
• Packaging Your Startup
» Create a solid team
» Target a segments market
» Build an advisory board
» Sign strategic partners or
» blue chip customers
© 2010 C2IVC
- 12. Crowding Funding , A alternative way
• Raise $ 300,000 from 1~3 investor
• Raise $ 30,000 from 10 private investors
© 2010 C2IVC
- 13. Everyone has different strengths
Tell your supporters all the
ways they can help
• Donate
• Spread the word
• Host a fundraiser
• Offer matching funds
• Feature your project on their
blog or social network
• Provide creative ideas to get
donors energized
© 2010 C2IVC
- 14. Identify Your Network
• Donors
• Friends
• Family
• Board Members
• Personal network
• Coworkers
• Staff
• Fans
• Community organizations
© 2010 C2IVC
- 15. Get your network to spread the word
Crowdfunding
Development Director
Emails 100 donors
asking for $10 each
and to tell 100 of their
friends.
100x100x$10 =
$100,000
Same effort, but better
result.
© 2010 C2IVC
- 16. Strategy to Action
• Building strategy is like a trip to the moon...you
know your target but it keeps moving and you
have to react accordingly
Strategy Paraphrased from
Regis McKenna
Vision
Resource Action
© 2010 C2IVC
- 17. Basic Elements of a Strategy
• Organization Chart
• Strategy Model
• Project & projectportfolio
• Projectportfolios’ Performance
• Projectiportfolios’ GANT chart - Roadmap
• Metrics - Measure of success
© 2010 C2IVC
- 20. Reasons for High Tech Company Failed
• Lack of Market Focus (a.k.a. Segmentation)
• Undifferentiated Products
• Failure to Establish the Right Competitive Barriers
• Misinterpretation of the Technology Adoption
Lifecycle Model
© 2010 C2IVC
- 21. It’s about collaboration
•Shareholder Engagement
•Coordination & Collaboration
•Social Media Integration—wikis, Google
Docs
© 2010 C2IVC
- 22. Opening Soon…… April 2010
www.c2ivc.com
Focus Areas:
• Open Source Software and Services
• Technology Enable Services
• Mobile Computing
© 2010 C2IVC
