In this talk, we briefly talk about fund raising for a hardware startup, then we open the floor for questions.

1. MIT Entrepreneurship and
Maker Skills Integrator
Building a company
June 13, 2017
Elaine Chen, Brian Yen

2. DE Themes, again

3. DE Themes, again

4. What we are NOT going to talk about
• Hypothesis testing – including how to test purchase intent
BEFORE having anything to sell
• How to define a product so you can have 50 people
working on it at once
• How to develop a product (hw or sw) effectively
• A path to greatness (aka how to get beyond a tiny
beachhead market via a product roadmap)
4

5. What we ARE going to talk about
• Brief discussion on fundraising
• AMA with Brian on everything else about building a
business
• HR
• Legal
• Financial
• … etc
5

6. Stages: Angel, Seed, A/B/C…
6
Source: Funders and Founders

7. 7
SOUL DESTROYING PROCESS

8. Do’s and Dont’s
DO
• When you raise, you raise.
When you are done raising,
focus on the biz.
• Practice milestone based
fund raising.
• Raise more than you think
you need.
• Choose your investors
carefully. Have they invested
in companies like yours?
8
DON’T
• Trickle fund-raise (your soul
will be destroyed)
• Take coffee with VCs when
you are not ready to pitch
(you are new once)
• Ask for $15M in your first 60s
elevator pitch with a VC
• 1 min >> 15 min >> 45 min >>
partner meeting etc

9. Example fund raising history: Fitbit
(Consumer electronics in health and wellness)
9
Source: Crunchbase
Founded in 2007
$66M total in 7y
IPO 2015

10. Example fund raising history: Rethink Robotics
(Industrial Automation)
10
Source: Crunchbase
Founded in 2008
$131.52M total in 9y
Too soon to tell

11. Is this a good seed stage VC for you?
11

12. How about this other one?
12

13. Or this one?
13

14. The role of crowdfunding: Cynthia’s story
14
$2.3M+

15. Resources
• Founders dilemmas
• Read Chapter 6 of Noam Wasserman’s “The Founders’ Dilemmas”
• Founders issues on the Trust Center FAQ with links to articles
containing formulas for the split
• Fund raising
• Rob go on how to raise a seed round
http://nextviewventures.com/blog/how-to-raise-seed-capital/
• Donna Levin’s January 2016 talk on fund raising (see Google Drive)
• Trust Center: FAQ section on fund raising
15

16. 16
AMA with Brian on building a business

17. Questions?
17

18. APPENDIX
18

19. What if my beachhead market is very, very small?

20. A path to greatness
• In the US market, an “interesting” (a.k.a. “investable”)
startup is one that will reach revenunes of $50m-$100m in
year 5. (Different in HK)
• How?
• More penetration
• More products
• More segments
• More geographical markets
• … etc
20

21. Roadmap Example 1: iPhone
21
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
iOS 1.2b1 iOS3.0iOS 2.0 iOS4.0
… … iOS4.1
iOS4.2.1
iOS4.3
iOS5.0
…
iOS6 iOS7 iOS8 iOS9 iOS10
iOS4.2.5
iOS4.2.6
iOS4.2.7
iOS4.2.8
iOS4.2.9
iOS4.2.10
iOS4.3.1
iOS4.3.2
iOS4.3.3
iOS4.3.4
iOS4.3.5
… … … … …