Venture capital can often seem like a black box—opaque and inaccessible. However, Mike Maples, Jr of Floodgate offers invaluable insights in his analysis revealing what makes the VC world tick and how founders can navigate it effectively.
Key Insights:
1) VC Dynamics: Understand the crucial relationship between entrepreneurs, venture capitalists, and limited partners.
2) Exponential Laws: Learn about Moore’s Law and Metcalfe’s Law, which dictate the scalability and network value crucial for startup success.
3) The Power Law: Explore how the value of the best startup outcome significantly exceeds all others, emphasizing the importance of aiming for massive impact.
4) VC Fundamentals: Maples discusses the dos and don’ts of fundraising from VCs, helping founders avoid common pitfalls and strategically position their startups.
This is the deck that accompanied Dave Kochbeck's webinar on July 10, 2014.
In the webinar he guided founders of all stripes through the perfect pitch. Determine what are the most important touch-points to prepare for, what you should be aware of and what you should focus in on and highlight about your exciting company. From founders seeking pre-seed to late seed funding, this is the most important Webinar you should attend.
Women 2.0's Webinars are a new event to promote new networks amongst the entire technology ecosystem in innovative cities around the world. This event is open to those who work, start, and fund tech companies. Both women and men are invited to attend.
To view our next webinar go here: http://women2.com/webinars
To apply for PITCH go here (Deadline July 31, 2014): http://bit.ly/1ojgVtj
Women 2.0 Fall Conference in San Francisco (September 30 - October 1, 2014): http://sf.women2.com
This presentation provides guidance on obtaining and preparing for a venture capital (VC) meeting. It discusses:
- The best way to get an introduction to VCs is through respected sources like other VCs, attorneys/advisors, or entrepreneurs in their portfolio. Cold calls are rarely successful.
- VCs evaluate opportunities using frameworks like the "4 Ps" - people, product, potential, and predictability. Pitch decks should be customized to the firm's focus areas.
- Meetings should be well-prepared for with backup technology, business casual attire, and practicing the pitch. The goal is to stimulate interest and get to the next step, not close the deal.
- Some things
Japheth Funding your startup - dating the devilWithTheBest
The document discusses different types of funding sources for startups, known as "the devils". It describes publishers, friends and family, angel investors, seed investors, venture capitalists, agencies, incubators, and accelerators. For each, it outlines what they provide, what they receive in return, what the founder gives up, and potential downsides. The document advises founders to pursue investors if they want a scalable business or publishers for a lifestyle business. It offers the accelerator program as a potential source of funding, mentorship, and business development deals.
This document provides guidance on raising money from investors. It explains that investors want to see a clear path to a profitable exit within 3-5 years by disrupting an existing market. Early money can come from friends and family, while angel investors may invest $25,000-$50,000 if provided with clear key performance indicators (KPIs) and traction in the form of real users and customers. Professional investors like venture capitalists will invest larger sums but require strong KPIs, contracts, and quarterly results. The document advises starting small with proofs of concept before seeking funding and presents a 10-slide template for pitching to investors focused on company purpose, problem, solution, market opportunity, competition, product, business
Startup founders -- this is your chance to get real answers to your real questions.
When you're seeking VC funds, it boils down to: What are venture capitalists really looking for -- and how can you show them you've got it?
In this presentation, Sean Foote, Founder and Managing Director of Co=Creation=Capital, and Gadiel Morantes, Chief Revenue Officer with Early Growth Financial Services discuss:
- What questions VCs will ask
- How to impress VCs
- Questions you should ask potential investors
- What NOT to ask investors
Co=Creation=Capital: Entrepreneurs + Money + Management = Co=Creation=Capital - because startups need all the help they can get!
EGFS is an outsourced financial services firm that provides accounting, CFO, tax, and valuation services and support to companies at all stages of the development process.
Startup Next Seattle - Product Market Fit by Joanna LordStartup Next
The document discusses finding product-market fit and provides 10 lessons for doing so. It defines product-market fit as having a product that satisfies customer needs in a specific market. The key lessons are to follow the market, realize your business model is more important than the product, start with the customer pain point, validate assumptions through customer interviews, have a minimum sellable product before an MVP, and architect for speed and flexibility to iterate quickly based on customer feedback. The goal is to achieve product-market fit through activation and retention of initial customers before focusing on growth.
This is the deck that accompanied Dave Kochbeck's webinar on July 10, 2014.
In the webinar he guided founders of all stripes through the perfect pitch. Determine what are the most important touch-points to prepare for, what you should be aware of and what you should focus in on and highlight about your exciting company. From founders seeking pre-seed to late seed funding, this is the most important Webinar you should attend.
Women 2.0's Webinars are a new event to promote new networks amongst the entire technology ecosystem in innovative cities around the world. This event is open to those who work, start, and fund tech companies. Both women and men are invited to attend.
To view our next webinar go here: http://women2.com/webinars
To apply for PITCH go here (Deadline July 31, 2014): http://bit.ly/1ojgVtj
Women 2.0 Fall Conference in San Francisco (September 30 - October 1, 2014): http://sf.women2.com
This presentation provides guidance on obtaining and preparing for a venture capital (VC) meeting. It discusses:
- The best way to get an introduction to VCs is through respected sources like other VCs, attorneys/advisors, or entrepreneurs in their portfolio. Cold calls are rarely successful.
- VCs evaluate opportunities using frameworks like the "4 Ps" - people, product, potential, and predictability. Pitch decks should be customized to the firm's focus areas.
- Meetings should be well-prepared for with backup technology, business casual attire, and practicing the pitch. The goal is to stimulate interest and get to the next step, not close the deal.
- Some things
Japheth Funding your startup - dating the devilWithTheBest
The document discusses different types of funding sources for startups, known as "the devils". It describes publishers, friends and family, angel investors, seed investors, venture capitalists, agencies, incubators, and accelerators. For each, it outlines what they provide, what they receive in return, what the founder gives up, and potential downsides. The document advises founders to pursue investors if they want a scalable business or publishers for a lifestyle business. It offers the accelerator program as a potential source of funding, mentorship, and business development deals.
This document provides guidance on raising money from investors. It explains that investors want to see a clear path to a profitable exit within 3-5 years by disrupting an existing market. Early money can come from friends and family, while angel investors may invest $25,000-$50,000 if provided with clear key performance indicators (KPIs) and traction in the form of real users and customers. Professional investors like venture capitalists will invest larger sums but require strong KPIs, contracts, and quarterly results. The document advises starting small with proofs of concept before seeking funding and presents a 10-slide template for pitching to investors focused on company purpose, problem, solution, market opportunity, competition, product, business
Startup founders -- this is your chance to get real answers to your real questions.
When you're seeking VC funds, it boils down to: What are venture capitalists really looking for -- and how can you show them you've got it?
In this presentation, Sean Foote, Founder and Managing Director of Co=Creation=Capital, and Gadiel Morantes, Chief Revenue Officer with Early Growth Financial Services discuss:
- What questions VCs will ask
- How to impress VCs
- Questions you should ask potential investors
- What NOT to ask investors
Co=Creation=Capital: Entrepreneurs + Money + Management = Co=Creation=Capital - because startups need all the help they can get!
EGFS is an outsourced financial services firm that provides accounting, CFO, tax, and valuation services and support to companies at all stages of the development process.
Startup Next Seattle - Product Market Fit by Joanna LordStartup Next
The document discusses finding product-market fit and provides 10 lessons for doing so. It defines product-market fit as having a product that satisfies customer needs in a specific market. The key lessons are to follow the market, realize your business model is more important than the product, start with the customer pain point, validate assumptions through customer interviews, have a minimum sellable product before an MVP, and architect for speed and flexibility to iterate quickly based on customer feedback. The goal is to achieve product-market fit through activation and retention of initial customers before focusing on growth.
This document provides advice for entrepreneurs on raising venture capital. It discusses that venture capitalists are buyers looking to minimize price while entrepreneurs are sellers looking to maximize price. It recommends choosing investors that understand your industry and stage of business. Venture capitalists seek high returns known as "homeruns" to provide returns for their investors. They look for great teams tackling large markets with defensible technologies and growth potential. The venture capital process is competitive, so entrepreneurs should get investors early and prove their business can reach break even without venture funding. Successful venture capital meetings involve being prepared, engaging personally, and positioning the entrepreneur's business as solving pains through a winnable solution.
This document provides guidance on factors that contribute to startup success and common mistakes made by founders. It discusses that ideas, teams, business models, funding, and timing all impact success rates. However, the most important aspects are having a product that customers want and need, validating ideas with customer interviews, and building something customers are willing to fund before fully developing the product. The document recommends customer development, bootstrapping instead of seeking funding initially, and being prepared to pivot the idea based on customer feedback in order to achieve product-market fit and have the highest chances of startup success.
Let’s take a closer look at the real numbers.
In 2014 to max out your 401K and IRA. A single investor will have a negative cash flow of $1916.67, and worst of all, you cannot touch that money until you are 65 years old. That could cost you close to $20,000 in management fees with investment returns of lower than 8% based on the old speculation module. But I know we can do better than this; in fact, much better.
If you apply your capital to the Arbitrage Strategy—first, your money will never be frozen and you can have access to it whenever you want and not 30 years from now.
Second, given the investment terms of a CD at 2%, a loan at a 5% and a preferred share yielding 8%, you will have a positive monthly cash flow of $172.68—producing free capital now so you can afford the lifestyle you deserve today!
Unlike the 401K and IRA strategy that needs a lifetime to work in your favor, the Arbitrageur Investing System will help you reap the rewards of all your hard work now rather than later.
Which do you prefer: pay the bank $2,000 a month for a chance to play later at 65, or have it pay you $200 now so you can enjoy the present without having to dream about the future?
Inside the Arbitrageur Investing System, I will take you by the hand and show you step-by-step how to achieve these financial returns.
We will go from module one, describing how to raise investment capital, all the way to module four, where you will be able to create your very own income portfolio, just as I did. This system includes practical examples and case studies with an interactive and customizable calculator. Which will do all the hard math for you so you do not have to, thus meeting all your individual investment needs, conditions, and terms.
In module one, you will learn the 7 ways to raise investment capital from scratch. Plus, you will learn how to adjust your tolerance for risk according to your personal profile.
In module two, you will learn how to invest under a corporate structure in order to maximize your returns while simultaneously minimizing your taxes.
In module three, you will learn how to invest like Buffett. And pull the same exact $300,000,000 trade he pulled on Bank of America and Goldman Sachs. Here, you will learn how to beat the investment bankers at their own game.
In module four, you will learn all the technicalities and fundamentals of investing, including tools and calculators that will do and adjust the math of the system to your own particular investment situation—from trading in complex investment instruments like ETFs all the way to knowing how to operate on margin.
This document provides tips on maximizing the benefits of recent legal changes that allow for general solicitation when raising funds from investors. The Jumpstart Our Business Startups (JOBS) Act now permits businesses to openly market private investment opportunities to accredited investors. Key points covered include how to effectively create and share an investment pitch online, establishing credibility, building an initial customer base through reward/demo crowdfunding, and differentiating your business from competitors. Access to the Wazgo platform and consulting services is also offered to help optimize investment offerings before seeking crowdfunding or private investors.
Helpful Marketing Training with JFDI classKevin Dewalt
This document introduces the concept of Helpful Marketing, which is a strategy for winning customers by proving you can help them solve their problems. It discusses focusing marketing efforts on a specific target persona and identifying problems they face and solutions you can provide. It then outlines three steps to Helpful Marketing: 1) Create a target persona, 2) Identify a specific problem-solution, and 3) Write content directly to your target persona to prove you can help them solve their problem. The document provides examples for each step, emphasizing that customers only care about solving their problems and marketers should focus on proving they are helpful to win customers' trust.
This document introduces the concept of Helpful Marketing, which is a strategy for winning customers by proving you can help them solve their problems. It discusses focusing marketing efforts on a specific target persona and identifying problems they face and solutions you can provide. The document provides examples of targeting an entrepreneur persona named "Dave" and writing directly to him to discuss whether he should relocate to a startup hub or remain in his local market. It emphasizes that customers only care about solving their problems and that marketers should focus on proving they are helpful through blogging, speaking, and other content that provides immediate value to the target persona.
dealroom.co presentation with notes at IDCEE 10 Oct 2014 Yoram Wijngaarde
The document discusses the future of fundraising and capital raising. It begins with an overview of traditional relationship-based banking (Finance 1.0). It then describes the rise of large banks and financial innovation (Finance 2.0), noting increased complexity, opacity, and imbalance. The document suggests we are moving toward Finance 3.0, characterized by simplification through technologies, peer-to-peer lending, and the fragmentation of funds. It addresses challenges in seed and growth capital investing and potential solutions like crowdfunding and syndication platforms. Finally, it introduces the company Dealroom as aiming to facilitate investment by curating company information for investors.
This document provides an overview of fundraising and bootstrapping strategies for startups in 2014. It discusses investors and what to know about them, such as most having no startup experience. Fundraising requires traction like 5000 users or $5000 in revenue. Bootstrapping options include the "kamikaze style" of working alone with no outside income for years or the "normal style" of balancing work and fundraising over time. Overall, the document advises startups to demonstrate traction and solve painful problems to attract investors and build sustainable businesses.
Joanna Lord, CMO at BigDoor, shared her lessons learned from a few BPMFs (before product/market fits), a few APMF (after product/market fits) and some NFPMFs (never found product/market fits).
Lesson #1: The market wins
Lesson #2: Realize your product is not the product
Lesson #3: Start at the pain point
Lesson #4: Ask all the questions
Lesson #5: Be skeptical
Lesson #6: Minimum sellable product
Lesson #7: Double back…a dozen times
Lesson #8: Repeat after me: activation & retention
Lesson #9: Architect for speed
Lesson #10: Validate qualitatively, verify quantitatively
Joanna shared this presentation at the NEXT Program in Seattle (swnext.co)
Seed funding and angel fundraising remains a art more than science. As someone who is heavily involved with startups and angel investors, here I have tried to answer the common question from entrepreneurs, startups and investors.
The Corporate Refugee Startup Guide Insights - USASBE PresentationDave Gee
The insights from these slides are intended to help first-time entrepreneurs, especially those leaving corporate, make an effective transition to the life of an entrepreneur. These are slides that were provided to a presentation to the United States Association for Small Business and Entrepreneurship.
These slides provide an overview of some of the insights from world-class VCs, angel investors, IP attorneys, researchers, entrepreneurs and more. The entire content is available in my book, The Corporate Refugee Startup Guide which is available on Amazon.
If you need guidance on your startup or want insights on how to launch an accelerator program contact Dave at: dave@startupguides.io.
This document provides guidance and advice for starting a startup. It emphasizes the importance of validating your idea with customers before building anything. Customer development and understanding customer needs are key. The five major factors that contribute to startup success are identified as the idea, team, business model, funding, and timing. Bootstrapping and selling the idea before building the product are recommended approaches. Resources for learning lean startup methodologies and customer development processes are provided.
The 10 Biggest Questions We Received From Tech Startups - NextView VenturesNextView Ventures
These were the most popular blog post we created in the last six months for our startup blog, The View From Seed. This site is dedicated to seed-stage tech startups in the web and mobile spaces. NextView is a leading seed VC located in Boston. Topics include raising venture capital, hiring a COO, content marketing and blogging, and more.
This document provides advice for start-up founders on fundraising and building a company. It discusses pitching to investors, common excuses investors give for not investing, and different types of investors. It also offers tips beyond fundraising, such as not following all advice, taking risks, and focusing on small successes initially rather than grand visions.
Get to know your investor before you send them a
deck. Easy tips to use.
The presentation has been made by Paul Belknap (Investment Manager,
Villgro Innovations Foundation) and Ullas Marar (Head - Scouting and Inspiration
Villgro Innovations Foundation).
1. To close an angel round, use "mass syndication" by dropping names of interested investors without a lead and writing your own term sheet with low valuations and investor-friendly terms.
2. Approach financing as if you won't find a lead and raise money before you need it with deadlines and social proof from interested investors.
3. Get introductions to seed stage investors through AngelList and StartupList and have traction in the form of a product in the marketplace before raising a seed round.
This document provides tips for entrepreneurs approaching venture capital (VC) firms for funding. It discusses understanding the VC business model, what makes an attractive investment opportunity, how to match your company's stage and profile to the right investors, pitching effectively, and navigating the matching process. The key points are that VCs seek huge financial returns, only invest in the top 1% of opportunities, look for large total addressable markets, proven teams, and high-growth potential. It emphasizes networking, choosing the right partner over firm, and being prepared to commit fully once funding is secured.
Series A Fundraising Guide (Investing Individuals Improving Our World) by AccionAlejandro Cremades
Series A Fundraising Guide 👇
Inside, you'll find insights on:
1) Preparing for your fundraise with a strategic lens
2) Pitching to investors with conviction
3) Setting up for diligence with transparency
4) Negotiating terms that respect both parties
5) And post-closing considerations to keep the momentum
Raising Seed Capital by Steve Schlafman at RRE VenturesAlejandro Cremades
Navigating the seed funding landscape can be complex and demanding. Thanks to insights from Steve Schlafman of RRE Ventures, their detailed presentation sheds light on this critical phase of startup development.
Key Points from the Presentation:
1) Sources of Seed Capital: Explore diverse funding sources from venture capital to angel investors and learn how to leverage them effectively.
2) Preparing for the Pitch: Understanding what investors look for in a seed stage startup is crucial— from traction and product to team dynamics.
3) The Pitch Itself: Learn how to create FOMO (Fear of Missing Out) among investors and how to convey your startup's value compellingly.
4) Post-Pitch Strategy: Discover what steps to take after your pitch to maintain momentum and secure funding.
More Related Content
Similar to Inside the Black Box of Venture Capital (VC)
This document provides advice for entrepreneurs on raising venture capital. It discusses that venture capitalists are buyers looking to minimize price while entrepreneurs are sellers looking to maximize price. It recommends choosing investors that understand your industry and stage of business. Venture capitalists seek high returns known as "homeruns" to provide returns for their investors. They look for great teams tackling large markets with defensible technologies and growth potential. The venture capital process is competitive, so entrepreneurs should get investors early and prove their business can reach break even without venture funding. Successful venture capital meetings involve being prepared, engaging personally, and positioning the entrepreneur's business as solving pains through a winnable solution.
This document provides guidance on factors that contribute to startup success and common mistakes made by founders. It discusses that ideas, teams, business models, funding, and timing all impact success rates. However, the most important aspects are having a product that customers want and need, validating ideas with customer interviews, and building something customers are willing to fund before fully developing the product. The document recommends customer development, bootstrapping instead of seeking funding initially, and being prepared to pivot the idea based on customer feedback in order to achieve product-market fit and have the highest chances of startup success.
Let’s take a closer look at the real numbers.
In 2014 to max out your 401K and IRA. A single investor will have a negative cash flow of $1916.67, and worst of all, you cannot touch that money until you are 65 years old. That could cost you close to $20,000 in management fees with investment returns of lower than 8% based on the old speculation module. But I know we can do better than this; in fact, much better.
If you apply your capital to the Arbitrage Strategy—first, your money will never be frozen and you can have access to it whenever you want and not 30 years from now.
Second, given the investment terms of a CD at 2%, a loan at a 5% and a preferred share yielding 8%, you will have a positive monthly cash flow of $172.68—producing free capital now so you can afford the lifestyle you deserve today!
Unlike the 401K and IRA strategy that needs a lifetime to work in your favor, the Arbitrageur Investing System will help you reap the rewards of all your hard work now rather than later.
Which do you prefer: pay the bank $2,000 a month for a chance to play later at 65, or have it pay you $200 now so you can enjoy the present without having to dream about the future?
Inside the Arbitrageur Investing System, I will take you by the hand and show you step-by-step how to achieve these financial returns.
We will go from module one, describing how to raise investment capital, all the way to module four, where you will be able to create your very own income portfolio, just as I did. This system includes practical examples and case studies with an interactive and customizable calculator. Which will do all the hard math for you so you do not have to, thus meeting all your individual investment needs, conditions, and terms.
In module one, you will learn the 7 ways to raise investment capital from scratch. Plus, you will learn how to adjust your tolerance for risk according to your personal profile.
In module two, you will learn how to invest under a corporate structure in order to maximize your returns while simultaneously minimizing your taxes.
In module three, you will learn how to invest like Buffett. And pull the same exact $300,000,000 trade he pulled on Bank of America and Goldman Sachs. Here, you will learn how to beat the investment bankers at their own game.
In module four, you will learn all the technicalities and fundamentals of investing, including tools and calculators that will do and adjust the math of the system to your own particular investment situation—from trading in complex investment instruments like ETFs all the way to knowing how to operate on margin.
This document provides tips on maximizing the benefits of recent legal changes that allow for general solicitation when raising funds from investors. The Jumpstart Our Business Startups (JOBS) Act now permits businesses to openly market private investment opportunities to accredited investors. Key points covered include how to effectively create and share an investment pitch online, establishing credibility, building an initial customer base through reward/demo crowdfunding, and differentiating your business from competitors. Access to the Wazgo platform and consulting services is also offered to help optimize investment offerings before seeking crowdfunding or private investors.
Helpful Marketing Training with JFDI classKevin Dewalt
This document introduces the concept of Helpful Marketing, which is a strategy for winning customers by proving you can help them solve their problems. It discusses focusing marketing efforts on a specific target persona and identifying problems they face and solutions you can provide. It then outlines three steps to Helpful Marketing: 1) Create a target persona, 2) Identify a specific problem-solution, and 3) Write content directly to your target persona to prove you can help them solve their problem. The document provides examples for each step, emphasizing that customers only care about solving their problems and marketers should focus on proving they are helpful to win customers' trust.
This document introduces the concept of Helpful Marketing, which is a strategy for winning customers by proving you can help them solve their problems. It discusses focusing marketing efforts on a specific target persona and identifying problems they face and solutions you can provide. The document provides examples of targeting an entrepreneur persona named "Dave" and writing directly to him to discuss whether he should relocate to a startup hub or remain in his local market. It emphasizes that customers only care about solving their problems and that marketers should focus on proving they are helpful through blogging, speaking, and other content that provides immediate value to the target persona.
dealroom.co presentation with notes at IDCEE 10 Oct 2014 Yoram Wijngaarde
The document discusses the future of fundraising and capital raising. It begins with an overview of traditional relationship-based banking (Finance 1.0). It then describes the rise of large banks and financial innovation (Finance 2.0), noting increased complexity, opacity, and imbalance. The document suggests we are moving toward Finance 3.0, characterized by simplification through technologies, peer-to-peer lending, and the fragmentation of funds. It addresses challenges in seed and growth capital investing and potential solutions like crowdfunding and syndication platforms. Finally, it introduces the company Dealroom as aiming to facilitate investment by curating company information for investors.
This document provides an overview of fundraising and bootstrapping strategies for startups in 2014. It discusses investors and what to know about them, such as most having no startup experience. Fundraising requires traction like 5000 users or $5000 in revenue. Bootstrapping options include the "kamikaze style" of working alone with no outside income for years or the "normal style" of balancing work and fundraising over time. Overall, the document advises startups to demonstrate traction and solve painful problems to attract investors and build sustainable businesses.
Joanna Lord, CMO at BigDoor, shared her lessons learned from a few BPMFs (before product/market fits), a few APMF (after product/market fits) and some NFPMFs (never found product/market fits).
Lesson #1: The market wins
Lesson #2: Realize your product is not the product
Lesson #3: Start at the pain point
Lesson #4: Ask all the questions
Lesson #5: Be skeptical
Lesson #6: Minimum sellable product
Lesson #7: Double back…a dozen times
Lesson #8: Repeat after me: activation & retention
Lesson #9: Architect for speed
Lesson #10: Validate qualitatively, verify quantitatively
Joanna shared this presentation at the NEXT Program in Seattle (swnext.co)
Seed funding and angel fundraising remains a art more than science. As someone who is heavily involved with startups and angel investors, here I have tried to answer the common question from entrepreneurs, startups and investors.
The Corporate Refugee Startup Guide Insights - USASBE PresentationDave Gee
The insights from these slides are intended to help first-time entrepreneurs, especially those leaving corporate, make an effective transition to the life of an entrepreneur. These are slides that were provided to a presentation to the United States Association for Small Business and Entrepreneurship.
These slides provide an overview of some of the insights from world-class VCs, angel investors, IP attorneys, researchers, entrepreneurs and more. The entire content is available in my book, The Corporate Refugee Startup Guide which is available on Amazon.
If you need guidance on your startup or want insights on how to launch an accelerator program contact Dave at: dave@startupguides.io.
This document provides guidance and advice for starting a startup. It emphasizes the importance of validating your idea with customers before building anything. Customer development and understanding customer needs are key. The five major factors that contribute to startup success are identified as the idea, team, business model, funding, and timing. Bootstrapping and selling the idea before building the product are recommended approaches. Resources for learning lean startup methodologies and customer development processes are provided.
The 10 Biggest Questions We Received From Tech Startups - NextView VenturesNextView Ventures
These were the most popular blog post we created in the last six months for our startup blog, The View From Seed. This site is dedicated to seed-stage tech startups in the web and mobile spaces. NextView is a leading seed VC located in Boston. Topics include raising venture capital, hiring a COO, content marketing and blogging, and more.
This document provides advice for start-up founders on fundraising and building a company. It discusses pitching to investors, common excuses investors give for not investing, and different types of investors. It also offers tips beyond fundraising, such as not following all advice, taking risks, and focusing on small successes initially rather than grand visions.
Get to know your investor before you send them a
deck. Easy tips to use.
The presentation has been made by Paul Belknap (Investment Manager,
Villgro Innovations Foundation) and Ullas Marar (Head - Scouting and Inspiration
Villgro Innovations Foundation).
1. To close an angel round, use "mass syndication" by dropping names of interested investors without a lead and writing your own term sheet with low valuations and investor-friendly terms.
2. Approach financing as if you won't find a lead and raise money before you need it with deadlines and social proof from interested investors.
3. Get introductions to seed stage investors through AngelList and StartupList and have traction in the form of a product in the marketplace before raising a seed round.
This document provides tips for entrepreneurs approaching venture capital (VC) firms for funding. It discusses understanding the VC business model, what makes an attractive investment opportunity, how to match your company's stage and profile to the right investors, pitching effectively, and navigating the matching process. The key points are that VCs seek huge financial returns, only invest in the top 1% of opportunities, look for large total addressable markets, proven teams, and high-growth potential. It emphasizes networking, choosing the right partner over firm, and being prepared to commit fully once funding is secured.
Similar to Inside the Black Box of Venture Capital (VC) (20)
Series A Fundraising Guide (Investing Individuals Improving Our World) by AccionAlejandro Cremades
Series A Fundraising Guide 👇
Inside, you'll find insights on:
1) Preparing for your fundraise with a strategic lens
2) Pitching to investors with conviction
3) Setting up for diligence with transparency
4) Negotiating terms that respect both parties
5) And post-closing considerations to keep the momentum
Raising Seed Capital by Steve Schlafman at RRE VenturesAlejandro Cremades
Navigating the seed funding landscape can be complex and demanding. Thanks to insights from Steve Schlafman of RRE Ventures, their detailed presentation sheds light on this critical phase of startup development.
Key Points from the Presentation:
1) Sources of Seed Capital: Explore diverse funding sources from venture capital to angel investors and learn how to leverage them effectively.
2) Preparing for the Pitch: Understanding what investors look for in a seed stage startup is crucial— from traction and product to team dynamics.
3) The Pitch Itself: Learn how to create FOMO (Fear of Missing Out) among investors and how to convey your startup's value compellingly.
4) Post-Pitch Strategy: Discover what steps to take after your pitch to maintain momentum and secure funding.
Raising capital is a pivotal process for any startup. This document outlines the vital phases every entrepreneur must navigate to transform an idea into a flourishing business. This resource provides a clear, detailed map of the funding landscape, from early angel rounds to the final stages before an IPO.
Key Highlights from the Document:
1) Pre-Seed and Seed Funding: These initial stages are crucial for getting your startup off the ground, focusing on proving your concept and building a minimum viable product (MVP).
2) Series A to C Funding: As startups progress, funding rounds grow larger and focus shifts from proving viability to scaling the business, enhancing market share, and possibly even preparing for global expansion.
3) Bridge and Mezzanine Financing: These less common but crucial stages provide the necessary capital to bridge gaps between major funding rounds or prepare for a public offering.
4) IPO: The ultimate goal for many startups, going public opens new avenues for capital and provides liquidity for early investors.
Navigating the venture capital landscape can be daunting for startups. PitchBook’s guide to VC fundraising provides a roadmap filled with critical insights to help entrepreneurs from Silicon Valley to Tokyo secure the capital they need to transform their startups into market leaders.
What the Guide Covers:
1) Stages of VC Funding: From seed to Series C and beyond, understand the typical progression startups follow and what is expected at each stage.
2) Evaluating Funding Needs: Determine whether your startup is ready for funding by assessing its current stage, from initial concept to scaling for market expansion.
3) Approaching Investors: Learn how to identify investors that align with your values, perfect your pitch, and effectively approach your target list.
4) Pros and Cons of Funding Types: A deep dive into the advantages and disadvantages of self-funding vs. external funding, helping you make informed decisions about the best path for your venture.
How Do Venture Capitalists Make Decisions by Harvard & Stanford Professors:
Venture Capitalists (VCs) play a pivotal role in shaping the future of innovation, funding groundbreaking startups that redefine industries. A comprehensive study led by Paul Gompers, along with esteemed colleagues from Harvard and Stanford, delves into the decision-making processes of VCs, offering unique insights into what drives their investment choices.
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1) Management Over Market: VCs prioritize the management team's capabilities more than the business's market potential, highlighting the critical importance of strong leadership.
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Inside the Black Box of Venture Capital (VC)
1. Inside the Black Box of Venture
Capital
Mike Maples, Jr
@m2jr; www.floodgate.com;
Revised 6-1-16
2. Topics
• VC at 100,000 feet.
• Legendary founders and legendary startups.
• Fundraising from VCs (dos and don’ts).
3. Before we get started, I acknowledge that...
• Not all VCs are universally liked;
• They sacrifice less than founders and are often overpaid;
• Only 3% of VC Partners generate >3x in their careers, but almost
all of them get rich no matter what;
• There is not nearly enough diversity in the VC business; It’s even
worse than the already-bad tech industry;
• A lot of VCs would not succeed if they had to run a startup.
4. Just so you know my many screw-ups (so far)…
I passed on
these…
These got
away…
5. This was my (positive) experience with VCs
…from the entrepreneur perspective
8. Public Equity
Absolute Return
Private Equity
Fixed Income
Real Estate
*Source: Andy Rachleff –
Benchmark Capital
Asset Allocation for a Limited Partner (LP)*
9. The Trade-off Between Risk & Return:
LP Perspective*
Return
Risk
*Source: Andy Rachleff –
Benchmark Capital
10. You are an LP: How would you rather see
a VC invest $10 million?
• Fund I
– Makes 10 $1M investments
– Makes 2x their money on every investment
• Fund II
– Loses all their money on 8 and
– Gets 20x their money on the remaining 2
• Fund III
– Loses all their money on 9 and
– Gets 50x their money on the remaining 1
• Accel XI
– Invest $10M in Facebook at $100M post
11. Key Thought:
VCs are paid to take high risk for high return. It’s the only
reason LPs invest in VCs.
VCs depend on legendary entrepreneurs, technology
discontinuity, and luck to create the massive outcomes
that make the model work.
18. The Power Law
97% of all exit profits
come from <10
>10,000 startups a year
19. The Power Law
97% of all exit profits
come from <10
>10,000 startups a year
The value of the best outcome exceeds all other
outcomes combined; the second best outcome
exceeds the value of subsequent outcomes and so-on.
20. The Power Law in Practice
• 10,000-20,000 companies will be funded by Angels
• 1,000-2,000 will get VC funding
• 50-100 are “OK, but not great” (exit > $50M)
• 10 +/- 5 will be special (exit > $500M)
• The best company in a given year will usually be
more valuable than all other 9,999 companies
combined
21. The Power Law: What It Means
Startup outcomes do not follow
a “normal” distribu6on
…they are governed by
excep6onalism
•Maples Angel
•Maples Fund I
•Y Combinator
•Exits in a given year
•Exits in a given decade
22. The Goal of a Tech Founder
Leverage the power of
Moore’s Law and/or
Metcalfe’s Law…
To create…
An extraordinary
outcome
26. VCs have very little incentive to tell
you exactly what they are thinking
• If they “pass” on your deal and it becomes awesome later, they might lose
out.
• The more time they have to evaluate your company, the more info they can
gather. As long as it doesn’t cost them to take more time, they often will.
• The VC will often give a “reason” for passing that doesn’t reveal what they
really think, oftentimes not to offend the entrepreneur.
• VCs often lead founders on, but many founders lead themselves on
because they read too much happy talk into the pitch meetings.
27. Why else might a VC be hard to read?
• Sometimes we really don’t know what we think after a meeting.
• We constantly have to make decisions about things we can’t fully
understand and predict and we know we are often wrong.
• Bombarded with pitches; perhaps I liked yours but just didn’t fall in
love yet. It happens…
• Sometimes I can’t describe what I “don’t like.” It just didn’t get me
excited enough to take the next step or stop diligencing what’s
already on my plate.
28. If a VC does not insist on a follow-up
meeting that happens in <2 weeks…
• They are almost certainly not going to invest in the next 6 months
(unless you are so successful you no longer need them.)
• They might say “the space is too crowded”, they are ”not funding
your market”, that they “can’t get the partners to agree to do it”,
etc., etc., etc.
• You can only “know” one thing: You didn’t get the VC to say yes.
• As an aside, this is why you should respect (and not resent) the VCs
who tell you the real reason they are passing.
• Another key point: It follows from this that when you tell other VCs
the “logical reasons” that other firms passed, you look
unsophisticated.
30. After a VC passes
• If your goal is to get money from them in the future, your job
is to be awesome next time you see them.
• Addressing their “objections” from the last meeting likely
won’t work. That’s not how they make funding decisions.
• Every future meeting is a clean slate opportunity to
demonstrate you are awesome.
• Don’t assume they remember clearly why they passed the
first time. They probably don’t!
• Remember: All you really know is they passed the first time.
32. NEVER say to a VC…
“We are talking to Sequoia”
(or somebody awesome like them)
33. Why?
• Many VCs will assume you would take Sequoia’s money if it is offered.
• If that’s the case, there is no point giving you a term sheet now….Better to
wait and see what Sequoia does.
• If Sequoia passes, one of two bad things happens to you...
– The VC might think he/she has negotiating leverage with you since Sequoia is
gone
– Even WORSE, the VC might assume Sequoia passed for a good reason.
• There is only one good answer to “who else are you talking to...”
– “The usual suspects.”
35. Getting the first lead offer is the
hardest part
• You have to estimate not just the probability that an investor will say yes,
but that they are willing to be the first to say yes.
• If I were a founder evaluating a VC, I would want to know if they are willing
to decide quickly and on their own.
• An investor who will only invest once you have a lead is worthless at first.
Pitching them early has no upside; only downsides.
• An investor who says “I will lead a $2M round by investing $1M if you find
another $1M is not leading.” They have done nothing for you. You have
made no real progress.
37. Raise when you can tell a compelling growth story
• Many founders raise because they need the money. (Duh! J )
• VCs don’t care about your need for money. They care about how you will
leverage Moore’s Law and/or Metcalfe’s Law to create a killer growth story.
• When VCs say “yes” or “no”, it’s not about whether they are willing to
make a bet on you…It’s not personal.
• Never forget, a rapid growth opportunity combined with a killer team is
what makes a startup VC-backable.
• Also remember: Compelling is in the eye of the beholder. You must know
what compelling is in your market. (this is where many founders are falling
short without knowing it.)
39. *Source: Andy Rachleff
Teams and Markets*
• “When a great team meets a lousy market the
market wins
• When a lousy team meets a great market the
market (sometimes) wins
• When a great team meets a great market
something special happens.”
40. Who is the ideal funding source?*
Potential Market Size Ideal Funding Source
Small Bootstrap or Angel
Unclear Bootstrap or Angel then VC
Large Venture Capital
*Source: Andy Rachleff
42. A few best practices for VC pitches
• The 30 Second Pitch
• The 2 Minute Pitch
• Tight Investor Meetings / Process
• Extra Credit
– Value Stack and 6/10 Law
43. Best Practice #1:
The 30 Second
Pitch*
What does your
company do?
How big is the
market?
What is your traction?
So What?
30 Second Pitch
*Source: Michael Seibel, YC
44. 30 second pitch
EVERYONE IN THE COMPANY SHOULD KNOW IT
• What does your company do?
• How big is the market?
• How much traction do you have?
45. What does your company do?
• Super simple and straightforward;
• Assume your audience knows literally
nothing;
• There is always a 1-2 sentence explanation.
48. How much traction do you have?
• Ideally 30% a month in an important area
(sales, revenue, users)
• What if you don’t have traction?
49. If you don’t have traction, must
show you are moving super fast
• Team started in January
• Everyone full time
• Interviewed 50 customers in February
• Beta in March
• Launched in April
• Next release in 2 weeks
• Moving fast, thinking like a startup
• If no traction, make sure you are realistic about the size
of the raise.
50. How big is your market?
GOOD
• We are Chegg and we rent textbooks.
• 20M students a year spend $30B on textbooks.
• If people spent a third as much to rent as to buy, we
only need 10% market penetration to do $1B in
revenue a year.
51. How big is your market?
BAD
• “Recruiting is a $500B market and it’s broken.”
• “5 companies in our space have raised more
than $10M and we have accomplished more
than them with far less.”
• “We are (name your solution) for Millennials.”
52. So What?
• This is your final flourish
• Your chance to say what victory looks like
• Your “computer on every desk and every home”
statement. Your “index the entire world’s knowledge”
statement.
• The “what happens when we totally win” statement.
53. Example of the “30 second Pitch” for Chegg
• We are Chegg. We let college students rent textbooks.
• Students spend $30B a year buying new textbooks. If we rent
them out for 1/3 of the price, we can sell $1B a year with only 10%
market share.
• We launched a pilot of our textbook rental service at 3 schools and
over 10% of students signed up, with the average student renting 3
books.
• People love this service. It’s working. It’s unstoppable. We think it
will be in every college in the next few years. Think back to when
you were in college. Why would anybody buy a textbook if they
could rent it?
54. Best Practice #2:
The 2 Minute
Pitch*
30 Second Pitch Plus…
Your Unique Insight
How you make money
Team
The big ask
2 Minute Pitch
*Source: Michael Seibel, YC
55. The 2 Minute Pitch
• Probably talking to an investor or someone who
can do something meaningful for the company
• 30 Second Pitch Plus
• Your Unique Insight
• How do you make money?
• Team
• The big ask
56. Your Unique Insight
• Your opportunity to tell me something I don’t know and most of the
world doesn’t know;
• Your billion dollar secret;
• The “a-ha” moment in two sentences;
• The unconventional wisdom;
• You will see the “a-ha” in the person if you got it right;
• See @m2jr Medium Post “Finding Billion Dollar Secrets.”
57. How will you make money?
• Don’t run away from it; just say it and move
on;
• If it’s ads, say it. If it’s virtual goods in games,
just say it; If it’s direct B2B sales, just say it;
• The trap is to say a bunch of stuff…which
says you have no idea…which means you
said less than nothing.
58. Team
• If your team has done something impressive that made
money for someone, you should call it out (e.g. – we are the
founders of Bazaarvoice)
• Don’t talk about awards, PHDs, merit badges, etc.
• What is the mix of people? Who is technical? Who is
business?
• Are you all working full time?
• How did you meet? How long have you worked together?
59. The Big Ask
• How much money are you raising? Convertible note or equity? Why?
• What is your Range? (Minimum viable raise to grow at an acceptable rate?;
How much faster can you grow with more money?)
• NEVER say “we can’t do A, B, or C until you give us money…” This is
unempowered and weak.
• ...Instead “This is moving fast. We’ve quit our jobs. We are coding. We
are meeting customers. We are cranking.”
• The less traction you have, the more you have to be willing to raise less.
60. Best Practice #3:
Effective investor
meetings*
Warm Intro
Think Parallel
1 Team Member
Effective Investor
Meetings
*Source: Michael Seibel, YC
61. Warm Intros
• Another founder from another awesome
startup;
• One of your current investors who loves you;
• NEVER someone who passed on you;
• The person making the intro should be
AWESOME and say YOU are awesome.
62. Think Parallel
• Fundraising is a Sprint; If you turn it into a Marathon you lose.
• Schedule all of your meetings in a single week 3 weeks out into the
future if you can; 2 weeks of meetings is OK, but close to the limit;
• “We would love to set up a meeting but we are building like crazy
and dealing with inbound customer interest the next two weeks.
Can we schedule something three weeks out?”
• Gives people time to get you on the calendar all in the same week;
• Communicates confidence and focus on customers, not desperate
need for money.
63. 1 Team Member
• When multiple people are fundraising, it takes time away
from growing the company.
• Even worse, if everybody does fundraising, it becomes top of
mind for everybody.
• Should be the CEO. Even if CEO is a coder and not a sales
person.
• OK to bring more people if it is close to the last step in
getting to Yes.
• Bad sign if the rest of the team doesn’t trust the CEO to
handle. Could be deeper issues.
66. The Value Stack
Value creation
Proprietary Power
Product Power
Company Power
Category Power
…avoids the need to
compete
…achieves product-
market fit
…prepares for rapid
scaling
…captures the value
from changing spend
67. More info on the Value Stack
Check out “Floodgate Value Stack
Primer,” Mike Maples, Jr
69. Key Floodgate Growth Framework –
The “6/10 Law”
Founding Year 6 Year 10
IPO
Sweet
Spot
Growth
70. 6/10 Law - Process
• Select 3 Analogous Companies (high, medium, low
success) with similar business models
• All 3 should have gone public
• Thought Experiment:
– Can we grow at those rates?
– How much money did they need to raise and when?
– When were they IPO-ready?
– What did their businesses look like? Revenue, growth, margins,
G&A, R&D, etc.
71. Example Recent FLOODGATE investment
in vertical Saas: Dispatchr
Founding Year 6 Year 10
IPO
Sweet
Spot
Growth
Oct
2013
2007
Analog: Veeva Systems
• 2013 Rev: $129M
• >100% growth
• Net income: $19M
• 600 people
72. But we are a “consumer” product…
• Google, Facebook, Twitter and LinkedIn all went public in the
6-10 window
• Are you building your consumer network at a comparable
rate?
• Are you planning to monetize at roughly the same time?
• How will your company benchmark to theirs if you dominate
your opportunity? (users, revenue, engagement, margins,
market share, etc?)
73. Applying the 6/10 Law
• We are not saying…All companies should go public
• We are not saying…You should pitch the 6/10 Law to a VC
• We are saying…6/10 Law is a diagnostic test for you the founder
• We are saying…In a crowded world of “lean startups”, let’s go
beyond…
– Playing checkers with one round at a time (this is chess!)
– “Just” a product roadmap. Great founders also seek a growth roadmap.
– Not just an MVP that evolves; a money-making machine in the future.
77. Special Thanks to…
• Andy Rachleff, co-founder of Benchmark Capital.
• Michael Seibel, Tyler Bosmeny, and the Y Combinator Team (their
podcast on How to Start a Startup is awesome.) Michael and Tyler
are legendary founders we are super proud to have backed.
• The Play-Bigger Team of Christopher Lochhead, Kevin Maney,
Dave Peterson, and Al Ramadan.
• All of the founders of the world who dare to be legendary.