Talk at Google Ireland for the Founder's Institute on Fund Raising & Equity. My focus was on my journey with Network365/Valista. There were 3 other speakers and the time allotted to each was just 1/2 hour. Hence most of the interesting slides are in the Appendix!

1. MY FUND RAISING JOURNEY | @raomal
RAOMAL PERERA
raomal@LeanDisruptor.com | @raomal @LeanDisruptor | www.facebook.com/LeanDisruptor
MY FUNDRAISING JOURNEY

2. RAOMAL PERERA
 Serial Entrepreneur
 ISOCOR (NASDAQ: icor) & Network365/Valista (Intel)
 Adjunct Professor of Entrepreneurial Studies
 INSEAD & UCD
 Business Model Innovation, Lean Startup, Design Thinking &
Design Sprints, Leadership & Fund Raising
 Consultant
 Clients include: MSD (Merck), HP (Hewlett Packard), IFB
(Irish Film Board), HSE (Health Service Executive), Arvato
(Bertelsman), Resmed, Openet, Glandore, SEI (Social
Entrepreneurs Ireland), DJEI (Dept of Jobs, Entreprise and
Innovation), CWIA (Cartier Women’s Initiative Awards) …
 Accolades
 Finalist Ernst & Young Entrepreneur of the Year
 Tech Pioneer World Economic Forum
 ISA Award for Outstanding Software Achievement
2

3. 3

4. 4

5. 5

6. Funding – SME Tool (Ireland)
This is a great tool for Irish Entrepreneurs.
Originally produced by the Dept of Finance and
now promoted and supported by the LEOs.;
https://www.localenterprise.ie/Discover-
Business-Supports/Supporting-SMEs-Online-
Tool/
6

7. Must Read
7
www.VentureDeals.com (used to be: AsktheVC.com)

8. Types of Market
• Clone Market
– Copy of an International business model
• Existing Market
– Faster/Better = High end
• Resegmented Market
– Niche = marketing/branding driven
– Cheaper = low end
• New Market
– Cheaper/good enough, creates a new class of
product/customer
– Innovative/never existed before
Clone Market Existing Market Resegmented
Market
New Market
8
www.steveblank.com

9. Existing Market Revenue Forecast
Existing Market
9
www.steveblank.com

10. Resegmented Market Revenue Forecast
10
www.steveblank.com

11. New Market Revenue Forecast
New Market Sales Curve
11
www.steveblank.com

12. The Players
12
Entrepreneur
Investor:
Angel /
Venture
Capitalist
Lawyer MentorAdvisor/
Corporate
Banker

13. 16 Common Questions about Fund Raising
– Steven McDermid
1. When should we raise capital; how do we time it
right?
2. What does a typical company raising a Series C look
like, and what are the right milestones we need to hit
in order to ensure a successful raise?
3. Should we ask for a specific valuation?
4. How much capital should we raise?
5. What investors should we target?
6. What are ‘crossover’ investors?
7. Should we include ‘strategic’ investors in our round?
8. How many investors should we approach? Can’t I
approach just a select few? 13
http://a16z.com/2015/02/27/16-common-questions-about-fundraising/

14. 16 Common Questions about Fund Raising
– Steven McDermid
9. Can’t I just have a conversation with Investors? Do I
really need to prepare a full slide deck?
10. How long does it take to raise a round?
11.I’m worried about sharing confidential information.
How much information should we share – and when
should I provide customer references?
12.What kind of financial model should I provide to
investors?
13.Should we raise debt instead of equity?
14.Should we use an advisor to help us raise the
round?
14http://a16z.com/2015/02/27/16-common-questions-about-fundraising/

15. 16 Common Questions about Fund Raising
– Steven McDermid
15.Should I sell some secondary stock?
16.What happens if I come up empty after running a
process, or if the market conditions turn against me?
15
http://a16z.com/2015/02/27/16-common-questions-about-fundraising/

16. Looking for Investment
• What is the most important thing
that an investor looks at?
• What is he investing in?
YOU!
16

17. Investors look for:
• Integrity
• Passion
• Experience
• Knowledge
• Skill
• Leadership
• Commitment
• Vision
• Realism
• Coach-ability
17

18. 18

19. 19
MY JOURNEY

20. 20

21. The Investment Dance
21
$
Teaser,
Elevator
pitch
2 pager, PPT,
working
sessions with
partner, team
Terms
discussed
Your team
pitches to their
full partnership
Final DD,
legal docs
drafted
Your
GREAT
innovation
3-9 months
Invited
to office
Term sheet
issued
Invited
for
coffee
They visit
onsite, key
suppliers,
…
Receive
them
onsite
Check
received
Now the
fun part
21

22. 22
THREE FOUNDERS:
CEO (LEADER)
CTO (TECHNICAL GURU)
SALES & BUSINESS DEVELOPMENT

23. copyright © 2002 Network365 Ltd. • company confidential
2000
2002+
network365 history to-date
Network365 innovation
SMS
messaging
Mobile
top-up
Mobile
payments
Global
presence
First
transactional
system
using WAP
Global
network
compliance
Mobile
Wallet
technology
3G
Europe’s first
3G trial
First
transactional
MMS application
SMS time
management
Mobile
Lottery /
Mobile
Billing &
Rating
First loyalty
Program in
Japan/ePurse
Global Payments
agreement
Optimization
of content
eyeWitness
technology
23

24. copyright © 2002 Network365 Ltd. • company confidential
industry recognition
GSM Award Winner 2002
Best Wireless Application Developer Ernst & Young
Emerging Entrepreneur award
nomination
One of “Europe’s
30 Hottest Tech Firms” 2001 &
2002
One of “Europe’s
Top Ten Start ups” Modezilla 50: The hot players
in wireless & I-mode
Ulster Bank/Irish Independent
Business Achievers 2002
finalist
'Tornado Insider 100’ featuring
Europe's top 100 emerging
private tech companies 2002
24

25. First Steps (Pre-Seed)
• Incorporated Company
–EQUAL split of the shares; 1/3 each
between the three founders.
• Unsecured overdraft of IE£60k
• Invested £7,501 each (Total of £22,503)
• Enterprise Ireland (Irish Government)
Feasibility Grant of IEP £15k
• Agreed that the founders will also
vest their shares over 48 months 25

26. Accepting Money from Friends & Family
When seeking money from friends
and family, it's important to be as
disciplined as you would be in dealing with a
professional investor. Here are some basic
rules
•Treat them as if they were strangers.
•Debt may actually be better than equity
•Tie all payments to your cash flow
•Consider nonvoting stock
26http://www.entrepreneur.com/article/51542

27. Initial Cap Table
Founder 1 – 750,100 @ £0.01
Founder 2 – 750,100 @ £0.01
Founder 3 – 750,000 @ £0.01
Valuation = £22,503
(Transferred 50k shares to each of my
four children)
27

28. Value of Founder’s Share = IEP 22,503
Ownership = 100%
External Funding = IEP 22k
28

29. Next
Funding:
•Capitalised the Co. with IE£22k
•Bank Overdraft IE£60k
•EI (Gov) Feasibility Grant IE£15k
•First Customer – Carphone Warehouse
IE£15K
•Did not draw a salary – but accrued it.
29

30. Build Profile
RAISE PROFILE
PR
(KINMAN)
ACCOUNTANTS
(PWC)
BANK
(AIB)
ENTERPRISE
IRELAND
LAWYERS
(MOP)
30

31. Angel Funding (Startup Funding)
• Build Product – Mobile Commerce Server
• Ask Andy De Mari (serial entrepreneur) to
join the Board as Chairman & Mentor
• Source Angel Financing ~ IE£1 million
• Get started on the PR campaign
31

32. Angel Types
Newbie: Easily seduced by the product and the story:
Strategy: Focus on the vision. Make him an advisor. Reciprocate his
love.
Thought Leader: look for deals in key markets, leveraging certain
trends
Strategy: Teach him something new about the market--share an insight.
Captain Diligence!: Team leader, gives your plan a virtual
colonoscopy
Strategy: Have a detailed business plan. Prepare to defend key metrics.
Follower: follows the lead of key influencers in the group
Strategy: Find out who the influencers are, skip the followers
Network Angel: Leverages multiple angel groups-even his deals
have deals
Strategy: Leverage his network to build a syndicate for your company 32

33. Angel Types
Darth Vader: Cynical, thinks of a million reasons to say
NO, negative influencer
Strategy: Avoid, counteract by gaining support of thought
leaders
Ego capitalist: He’s cool, he’s hip, he’s made money as
a CEO and he’s figured out the formula--invest in what
made him $$ before.
Strategy: Wear a hoodie with his incubator’s name on it
Mercenary: Feigns interest but is really looking to sell
you his services
Strategy: Use pepper spray
33

34. Angel Funding
34
Tip:
Make sure that you are not held hostage by any angels.
They are important but rarely in a position to determine
the company’s direction. Consider setting-up a special –
purpose limited partnership controlled by one of them
as a vehicle to invest. It is not fun to chase 50+
signatures when you want to do any financing.

35. Mentor Capital
What angel investing can be all about...
•Individual mentor and investor
•Helps with an angel or VC round
•Joins your team and rolls up sleeves
•Finds early €
•Helps you achieve milestones
•Introduces you to angels and VCs, when you are ready
How to find mentors:
•Network
•Ask your lawyer
•Go to angel pitch events
•Contact experts in your field who might be mentors
•Examine similar companies: who are their advisors?
35

36. Angel Funding Series A1
Series A1: 400,000 @ IE £1.00
Total No. of Shares = 2,650,300
Valuation IE £2.65 million
36

37. Angel Funding Series A2
Series A2: 724,700 @ IE £1.75
Total No. of Shares = 3,375,000
Valuation just under IE £6 million
TIP:
Mentors are great. There’s no reason not to give
someone a small success fee if they help you raise
money
37

38. CAP Table at Angel Round
Raomal Perera 19.2% IR£7,501 IR£0.01 750,100
Denis Hennessy 19.2% IR£7,501 IR£0.01 750,100
Patrick O'Callaghan 19.2% IR£7,501 IR£0.01 750,100
Founders 57.7% IR£22,503 IR£0.01 2,250,300
Private Investors - Series A1 10.3% IR£400,000 IR£1.00 400,000
Private Investors - Series A2 18.6% IR£1,268,225 IR£1.75 724,700
Staff 10.9% IR£0.10 425,000
Directors 2.6% IR£0.10 100,000
38

39. Value of Founder’s Share = IEP 3.9m+
Ownership = 57.7%
External Funding = IEP 1.69m+
TIP:
Don’t be held hostage by any Investor.
Make Sure Friends and Family understand the ‘Risk’ in
the investment.
39

40. “Today Knowledge
has Power. It
controls access to
Opportunity and
Advancement.”
― Peter Drucker
40

41. N365: Close 1st Major Customer Deal
Closed first customer deal with Digifone (now
O2). Licence fee: > IE£80k + maintenance
41

42. N365: Built a Pipeline
Second Telco customer (HK-CSL)
at over 50% probability
42

43. Convertible Loan from VC
Received €1.0m as a Convertible Loan from
a VC.
Loan to convert into shares at a discount of
10%
43

44. VC Funding Series B
• €15m
• Pre money valuation €30m
– Dropped from €38m due to dot com crash
• Price per share €6.1418
– Dropped from €7.54491
• Employee Option Pool (20%)
• 2 Investor Directors
• Legal fees capped at £25k
• Weighted average anti-dilution
• Liquidation Preference etc…
44

45. Value of Founder’s Share = IEP 13.8m+
Ownership = 30.6%
External Funding = IEP 16.69m+
TIP
Understand the economic and control terms
45

46. VC Funding Series C
• €10m
• Pre money valuation €21m
• C convertible preferred shares @ €2.801 per share
• Employee Option Pool (20%)
• 3 Investor Directors
• Keyman insurance for Raomal Perera & Denis
Hennessy
• Legal fees capped at £50k
46

47. Moving to the US
• Consider buying a US product firm to establish a
beach-head
• Choose US geography based on proximity to
customers and relevant capital
• Keep engineering in a lower-cost region outside of
US
• You don’t need to hire an American to run your
operation but your US head should have US
experience, especially sales & business
development
• Leverage existing multinational customers
/partners 47

48. Acquisition Series C-1
• €11m
• Acquired iPIN
• Entry into the US market
• Create clear market leader
• Build strength against new competitors
• Accelerate growth and profitability
48

49. raomal@LeanDisruptor.com | @raomal @LeanDisruptor | www.linkedin.com/in/raomal
RAOMAL PERERA
ADDITIONAL MATERIAL

50. MY FUND RAISING JOURNEY | @raomal 50
THE TOOLKIT

51. Master Your Weapons
51
• Yourself
• Business Model Canvas
• Your Pitches: Elevator Pitch, 2-page
Executive Summary, Slide Presentation
• Pitching Skills
• Financial Plan – do stress test your
assumptions
– Pricing
– Market
– Customers, Partners
• Negotiation Skills
51

52. 52

53. Problem
Solved?
U
Do
Better
Sell
Team C
M
Ask
Next
€
www.aristo.ie

54. Financial
Model
Business
Model
Business
Idea
Financial Model
Your plans for:
• Buying & Selling
• Overheads
• Funding
• Fixed Assets
Projected:
• Profit & Loss
Account
• Balance Sheet
• Ratios
But will it make
money?
54

55. Obvious But Essential
• Your Financial Plan must clearly explain how the
macro view of the business opportunity in your
business plan translates into a micro view of how
investors can generate a return by investing in
your enterprise.
• I cannot emphasize enough how much thought
needs to go into preparing the financial model to
show that you truly understand your business
model
• Know your model, own your model!
55

56. Negotiation
56
Tip:
Three things matter when negotiating a
financing;
1.Achieving a good and fair result
2.Not killing your personal relationship getting
there
3.Understanding the deal that you are striking

57. Negotiation
57
• Your biggest advantage is to have a solid Plan B –
lots of interest and competition for the deal.
• Never make an offer first – Why run the risk of
aiming too low
• Listen more than talk – especially at the
beginning of the negotiation
• Understand the market terms and whether they
apply to your situation.
• Have an open and collaborative approach with
your Investor.

58. Company
Early
product
Seed
the
Market
Market
Penetration
Trade Sale
/ IPO
Bootstrap to Nail the
Problem
Series C/D
Investment
Series B
Investment
Seed Funding
1: Problem /Solution Fit
2: Product/Market Fit
3: Scale
4: Exit
Stepping Stones
• Customer Development
• MVP
• Early Revenues
• Build Team
• Aggressive Market Rollout
• Large
Market
Opportunity
confirmed

59. www.facebook.com/LeanDisruptor
Advice to startups – Heidi Roizen DFJ
59
http://heidiroizen.tumblr.com/post/139377970205/dear-startups-heres-
how-to-stay-alive
• Stop clinging to your (or anyone else’s)
valuation
• Redefine what success looks like
• Get to cash-flow positive on the capital you
already have (AKA, survive)
• Understand whether your current investors
are going to get you there
• Stop worrying about morale
• Cut more than you think is needed
• Focus maniacally on your metrics
• Hunker down

60. 60
VENTURE CAPITAL FUNDING

61. History
• General Georges Doroit is considered to be the
father of venture capital industry – founder of
INSEAD
• In 1946 he founded American Research and
Development (ARD) Corporation, whose biggest
success was Digital Equipment Corporation.
– When Digital Equipment went public in 1968 it
provided ARD with 101% IRR.
– ARD's US$70,000 investment in Digital
Corporation in 1959 had a market value of
US$37mn in 1968. 528x!!
• The first Bay Area venture-backed startup is
generally considered to be Fairchild Semiconductor,
funded in 1959 by Venrock Associates (Rockefeller)61

62. What you need to know about Venture Capital
Venture capitalists:
– Raise pools of capital from institutional and
individual investors
– Finance new and rapidly growing companies;
– Purchase preferred equity securities and take
board positions;
– Add value to the company through active
participation;
– Take higher risks with the expectation of higher
rewards;
– Have a long-term orientation
– Make $$$ by via M&A or IPO liquidity events
62

63. 63
The VC’s Internal Deliberation Cycle
One Pager
Y N
Initial Diligence Financial Model
Y N
Deep Diligence Scenario Analyses
Y N
Term Sheet & Negotiations
Oppt. introduced at
weekly investment
team meeting
~ 2 weeks
Initial findings and
assumptions
reviewed at weekly
team meeting
~ 2-3 months
Detailed findings and
assumptions
presented to
investment
committee
New oppt
sourced, added
to funnel
800
400
160
60 closed
4,000

64. VC Funding
TIPS:
•Understand the economic and control terms
•Get to know the General Partners in the VC –
They matter and make the decisions
•The term sheet is critical. What’s in it usually
determines the final deal structure. Don’t think
of it as a letter of intent. Think of it as a blue
print for future relationship with your investor.
•Liquidation preference is a critical term that is
part of most equity financing
•Move to close the deal quickly – From Term
Sheet to money in the bank - we did it in 10
days! 64

65. Convertible Debt
The stock price is not set and is determined at
a later date when a larger financing occurs.
• Discount
• Time horizon
• Valuation Caps
• Interest Rate
• Conversion Mechanics
• Conversion in a sale of the company
65

66. Warrants
• In finance, a warrant is a security that
entitles the holder to buy the underlying
stock of the issuing company at a fixed price
called exercise price until the expiry date.
66

67. Sample Due Diligence Checklist
• Financial Information
• Products
• Customer Information
• Competition
• Marketing, Sales and Distribution
• R&D
• Management and Personnel
• Legal and Related Matters
67

68. 68
Term Sheets
–What purpose do term sheets serve?
–What are the basic components?
–Who is protected?
–How do terms differ between earlier and later stage
investments?
–How do terms change under varying market conditions?
• Term Sheet Templates:
• US: NVCA
– www.nvca.org
– Templates of legal documents / term sheet – New edition May 2014
• France: AFIC
– http://www.afic.asso.fr
– Guide des bonnes pratiques du Capital-Risque
• UK: BVCA
– www.bvca.co.uk
– Standard industry documents / model documents for early stage
investments / term sheet

69. Finalizing the Investment
69
$
Teaser,
Elevator
pitch
2 pager, BP,
working
sessions with
partner, team
Terms
discussed
Your team
pitches to their
full partnership
Final DD,
legal docs
drafted
Your
GREAT
innovatio
n
3-9 months
Invited
to office
Term sheet
issued
Invited
for
coffee
They visit
onsite, key
suppliers,
…
Receive
them
onsite
Check
received
Now the
fun part

70. Purpose of Term Sheets
• Term sheets are:
– Negotiation documents between investors and
companies
– Roadmap for drafters of the binding legal documents
– Quick references for investors
• Term sheets are not:
– Legal documents. They are non-binding. Legal PE
investment docs include:
– Stock Purchase Agreements
– Certificates Of Incorporation
– Investor Rights Agreements
– Voting Agreements
– Rights of First Refusal and Co-Sale Agreements
– Management Rights Letters
– Indemnification Agreements
– Model Legal Opinions
70

71. The Bones
• Amount raised & valuation
• Financing structure
• Instruments (to limit risk)
• Reps & warranties
• Investors’ rights
• Management terms & conditions
71

72. Amount Raised & Valuation
• Post-, pre-money
– Series A wants 20% of XYZ Corp. for its €4.0m investment:
€ investment / € value of company = % ownership
€ investment / % ownership = € value of company
€20.0m = value of XYZ Corp.
Post money = €20.0m
Pre money = €16.0m
• Price per share
– 5.0m shares outstanding before new financing
€ share price = € value of company / # shares outstanding
€ share price = €16.0m / 5.0m shares
Price per share = €3.20
# new shares issued = € investment / € share price
# new shares issued = €4.0m / €3.20
# new shares issued = 1.25m shares
72

73. Financing Structure
• Lead investor
• Syndicate of co-investors
• Closing date, no-shop
• Tranches and milestones
• Dividends and warrants
• Capitalization structure, pre- and post-
investment
– Option pool
73

74. Instruments
• Anti-dilution (at next round)
– Protects my ownership percentage
–Weighted average
–Full ratchet
• Liquidation preferences (at exit)
– Me first, then everyone else
–Not participating with common (favors
common)
–Fully participating with common (favors
preferred)
– Pay to play 74

75. Example: Liquidation Stacks
0
25
50
75
100
0 25 50 75 100 125 150
Proceeds($Millions)
Exit Value ($ Millions)
D Round
A-B-C Round
Common
75

76. Reps & Warranties
• What is the true and complete state of
this company?
– Company registration
– Financial statements
– Business plan
– IP rights and other assets
– Liabilities
– Material contracts
– Litigation
76

77. Investors’ Rights
• Redemption
• Conversion
• Registration & piggy back
• Board representation
• Reporting and board schedule
• First refusal
• Drag along
77

78. Management Terms & Conditions
• Divestment restrictions
• Protection provisions
• Vesting
• Non-compete
• Nondisclosure
• Expenses, diligence
78

79. Discount Rates
• Why so high
(typically 40% –
75%)?
– Compensation for
company building,
value add
– Illiquidity of the
shares
– As a proxy for
haircutting financial
projectionsSeed Start-up Expansion ExitMezzanine
Stages
JustifiableDiscountRate
Base RORSystematic Risk
79

80. Pitching
PITCH KILLERS
•Don’t know your audience
•Opening with team bios
•Slide abuse
•No hook/No power
•Monotone/lecturing with
many people
•Not prepared for Q&A
•Bullshitting (there’s no
way this can fail)
•Weak closing
KILLER PITCHES
Know your audience
Opening with The Promise
Kawasaki’s 10/20/30 rule
Driving home the need
Athletic presentation by 1
person
Prepared for Q&A
Credibility (these are the
risk, we mitigate them by..)
Killer closing
80

81. How to Pitch to Investors – Sequoia, 500 Startups …
81
https://e27.co/500-startups-sequoia-others-want-pitch-20151127/
1. “We often say if you have traction, lead with
traction” – Dave McClure, 500 Startups
2. “Exceptional storytellers make you want to believe”
- Tomasz Tunguz, Redpoint Ventures
3. “Crystal-clear thinking is one of the things we look
for, not a fancy slide pitch” - Douglas Leone,
Sequoia Capital
4. “Has the founder a secret — a novel insight drawn
from personal experience?” – Marc Andreessen,
Andreessen Horowitz
5. “Say what you’re doing as soon as possible,
preferably in the first sentence” – Paul Graham, Y-
Combinator

82. A Good VC Pitch – What is the opportunity?
• Tells VCs what they need to know
• Is different from your customer sales
pitch
• Is about your business, not about your
product
• Is clear about what you do
• Excites VCs about the opportunity to
build a market leader
82

83. A Good VC Pitch – Deal with the Risks
• Deal honestly with your key risks:
• Product Risk: Does the product work & meet
customer needs?
• Market Risk: Is there a large € market for this?
• Competitive Risk: Is this the best company in this
space?
• Management Risk: Is this the right management
team to execute and build this business?
• Liquidity Risk: Can VCs exit (within the timeframe
of the fund) and return € to investors?
83

84. What You Say – What the VC Hears
• We are three years ahead of the market
– OK, call me in two years when customers need
you, if you haven’t run out of money waiting for
the market to emerge.
• The big guys don’t have a clue
– Great. They won’t partner with you, either.
• Our model is conservative and only assumes
we get 1% of the market.
– Why 1%? Your model is faith-based, not fact-
based.
• We are the next Instagram.
– Please don’t skip your meds. 84

85. What You Say – What The VC Hears
• We are Groupon for restaurants, events….
– You and 10,000 others… most of whom will fail
• We are destined to win because our product is
so compelling.
– And you’ll be outclassed by folks with better
marketing
• Exit strategy? As the next big thing, we’ll IPO
for sure.
– But 95% of exits are M&A.
• We have no competition.
– You have no market… OR...
– Really? We met two competitors last month 85

86. The Letters of Intent
– The Other Term Sheet
• Structure of the deal.
• Carve-out
• Asset deal or a stock deal
• Assumptions of Stock Options
• Reps, Warranties & Indemnification
• Escrow
• Confidentiality & Non-disclosure Agreement
• Conditions to close
• The No-Shop clause
• Fees, fees and More fees
86

87. The Legal things you should know
• Intellectual Property
• Employment Issues
• Incorporation
• Stock Options
• Accredited Investors
• Valuation
87

88. The Key to Getting Funded
• Has a credible CEO /founders with relevant market
experience for this business
• Has traction & proof points (customers)
• Is strongly differentiated from the competitors
• Has a well conceived business model
– Financials are supported by business assumptions
– Company is metrics and milestone driven
– CEO/team knows what it takes to get sustainable growth
– Is capital efficient
– The economics seem to make sense
– The team lives their model
• Is solving a problem that matters and captures the
investors imagination
88

89. The Dream Team
• Made € for investors
• Built marquee companies
• Has startup experience
• Worked together before
• Developed world class products
• Dealt well with adversity; turned around company
from under performer to high impact winner
• Managed positive M&A or IPO exits
• Has an excellent contact network in this market
• Hires well
89

90. 90
FUNDING OPTIONS

91. Who’s Your Investor? The Good, The Bad
Investor The Good The Bad
You • You’re the boss
• Total control
• Total ownership
• Minimal funding
• No feedback
Angel(s) • Mentoring
• Feedback
• Moderate funding
• No obligation to repay
• Limited runway
• Limited network
• Some dilution
VCs • Unlimited funding
• Long runway
• Large network
• Good governance
• Your credibility
• Conflicting agendas
• Loss of control
• Massive dilution
Bank • No equity dilution • No mentoring/feedback
• No network
• Bias on cash flow
• Obligation to repay
91

92. Investor Types by Stage
Financing Round Definition Typical Amounts Typical Investors
Pre-seed Proof of concept - - Visa, mortgage
- Friends & Family
- Small grants
Seed Prototype (alpha) €25k - €500k - Friends & Family
- Govt. Agencies
- Angels
Start-up Commercial device
(beta)
€500k - €3m - Super Angels
- Early-stage VCs
Expansion
- 1-3 rounds
typical
Strengthen team
Scale
manufacturing
Expand sales
€2m - €10m - VCs
- CVCs
Mezzanine/Bridge CFBE
Position for IPO
€5m - €30m - VCs
- Cross-over funds
Buy-out Secondary sale - - PE firms
www.thousandseeds.com 92

93. Funding – SME Tool (Ireland)
This is a great tool for Irish Entrepreneurs.
Originally produced by the Dept of Finance and
now promoted and supported by the LEOs.;
https://www.localenterprise.ie/Discover-
Business-Supports/Supporting-SMEs-Online-
Tool/
93

94. Funding: Bootstrapping
Good Books:
 Seth Godin – Bootstrappers Bible
 37 Signals - Getting Real & Rework
7 bootstrapper tools
1. Nothing to Loose
2. Happy with small fish
3. Presidential Input
4. Rapid R&D
5. The Underdog
6. Low Overhead
7. Time
94

95. How To Run A Company On A Shoe String
(i.e. Bootstrap)
What are the best productivity tools for
entrepreneurs: http://www.quora.com/What-are-the-
best-productivity-tools-for-entrepreneurs?srid=9JG
eg: Dropbox, Evernote, Gmail,Google Docs, LinkedIn,
Mailchimp, Mindmaps, Skype, Wunderlist, Xobni,
Expensify, AsanaFlow, Basecamp etc…
95

96. Funding: Award Programmes
• Award programmes
• Inter-trade Ireland’s Seedcorn competition
• Cartier Women’s Initiative
• Social Entrepreneurs Ireland
• Lots more …….
Exercise: Search for Award programmes
both local & global that you could avail off.
96

97. Enterprise Ireland Funding
www.enterprise-ireland.com
www.Startinireland.com
97

98. Get Investor Ready - Enterprise Ireland Pre Investment
Supports for High Potential Start-Ups (HPSUs)
• HPSU Feasibility Grant - €15k (50%)
Used to investigate the viability and potential of an
innovative/high potential start-up and the development
of an Investor Ready Business Plan. Eligible costs include;
Salaries and Overheads, Consultancy Fees, Foreign Travel
and Subsistence, EI approved Business Accelerator Fees,
Trade Fair costs and Prototype costs.
• Mentor Grant - €1,750
Used to support the cost of a Mentor Assignment.
Enterprise Ireland can match you with an experienced
business mentor to assist you in your start-up phase or
advise on specific areas of your plan.
98

99. Get Investor Ready - Enterprise Ireland Pre Investment
Supports for High Potential Start-Ups (HPSUs)
• Innovation Voucher -€ 5k
Innovation Vouchers, worth €5k, are available to assist a
company to work with a registered college or knowledge
provider to explore a business opportunity or technical
problem.
• New Frontiers Entrepreneur Development Programme -
€15k (6 months full-time)
National incubation programme that offers successful
applicants with a package of supports to help accelerate
their business development and to equip you with the
skills to successfully start and grow a company.
Applications must be made directly to your nearest
participating Institute of Technology. 99

100. Get Investor Ready - Enterprise Ireland Pre Investment
Supports for High Potential Start-Ups (HPSUs)
• Competitive Feasibility Fund - North East Region - €25k
Fund to assist a new start-up company or individual
entrepreneur to investigate the viability of a new significant
growth orientated business or proposition to be located in
the North East Region (counties Louth, Cavan and Meath).
• Competitive Feasibility Fund for Female Entrepreneurs -
€25k
Fund to assist Female Entrepreneurs to investigate the
viability of a new growth orientated business that can
succeed in global markets. The focus is on developing new
businesses that can move beyond the domestic market and
demonstrate real potential for internationalisation.
100

101. Investor Ready - Enterprise Ireland Equity Investment Supports
for High Potential Start-Ups (HPSUs)
• Competitive Start Fund for Female Entrepreneurs - €50k
€50k equity investment to support eligible, female-led, early
stage start-up companies. Learn more about the type of
companies supported and the next closing date for
applications.
• Competitive Start Fund (CSF) €50k
€50k equity investment to support eligible early stage start-up
companies. Learn more about the type of companies
supported and the next closing date for applications.
• Innovative HPSU Fund (Equity) €150k-€350k
The Innovative HPSU Fund allows Enterprise Ireland to offer
equity investment to HPSU clients, on a co-funded basis to
support the implementation of company business plans. First
time and follow-on equity investments in HPSUs are supported
under this offer.
101

102. Crowdfunding
Entrepreneurs using :
Today’s technology (internet and website) to
 Reach many and
 Find capital to their idea, project or company
102

103. Funding - Options
OTHER
• Bank Loan
• Factoring / Invoice Discounting:
• Leasing:
• Hire purchase, finance lease
103

104. Angel Investment Gust Platform
• Gust.com/entrepreneurs (deal flow
platform)
• Edit Business Details
• Upload a Video Pitch
• Share Documents Secularly
• Track Investor Activity
• Tips from Investors 104

105. 16 Common Questions about Fund Raising
– Steven McDermid
1. When should we raise capital; how do we time it
right?
- Raise money when you have sufficient cash runway
2. What does a typical company raising a Series C look
like, and what are the right milestones we need to hit
in order to ensure a successful raise?
- Alignment of capital to milestones
3. Should we ask for a specific valuation?
- Take the best offer that the market offers
4. How much capital should we raise?
- Be strategic about the amount of capital you raise
105http://a16z.com/2015/02/27/16-common-questions-about-fundraising/

106. 16 Common Questions about Fund Raising
– Steven McDermid
5. What investors should we target?
- Find investors appropriate for your stage of the
company
6. What are ‘crossover’ investors?
- Typically invests in public companies but also invest in
private companies
7. Should we include ‘strategic’ investors in our round?
- It may close some other doors
8. How many investors should we approach? Can’t I
approach just a select few?
- It is a balance
106http://a16z.com/2015/02/27/16-common-questions-about-fundraising/

107. 16 Common Questions about Fund Raising
– Steven McDermid
9. Can’t I just have a conversation with Investors? Do I
really need to prepare a full slide deck?
- Make those interactions count
10. How long does it take to raise a round?
- It takes time. Key is execution of the business
11.I’m worried about sharing confidential information.
How much information should we share – and when
should I provide customer references?
- No fear here
12.What kind of financial model should I provide to
investors?
- Understand your cash burn and financials 107
http://a16z.com/2015/02/27/16-common-questions-about-fundraising/

108. 16 Common Questions about Fund Raising
– Steven McDermid
13.Should we raise debt instead of equity?
- Debt is a good source of capital. But you do have to
repay debt
14.Should we use an advisor to help us raise the
round?
-Not every company needs an advisor
15.Should I sell some secondary stock?
- Maybe interpreted as a negative signal
16.What happens if I come up empty after running a
process, or if the market conditions turn against me?
- Make sure you have a plan B
108
http://a16z.com/2015/02/27/16-common-questions-about-fundraising/

109. raomal@LeanDisruptor.com | @raomal @LeanDisruptor | www.linkedin.com/in/raomal
RAOMAL PERERA
THANK YOU!