This document provides an overview of a four-part series on launching a scalable startup from an entrepreneur's perspective. The series will cover initial meetings to launch, first funding and funding lifecycles, turning an idea into a product, and fixing revenues. The author, Tom Nora, has over 20 years of experience in tech startups as an executive and consultant. He will draw from his engineering and business background to discuss key topics like seed funding, fundraising cycles, investor goals, and requirements for startups seeking initial capital.

1. "AN ENTREPRENEUR’S PERSPECTIVE:
LAUNCHING A SCALABLE STARTUP”
-------
A FOUR PART SERIES
Tom Nora
@tomnora | tomnora2020 @ gmail.com | 310-855-2199

2. THREE PART SERIES
• Part
1
–
First
Mee)ng
to
Launch
• Part
2
–
First
Funding,
Funding
Lifecycle
• Part
3
–
Idea
to
Product,
Produc)za)on
• Part
4
–
The
Turnaround
–
Fixing
your
Revenues

3. TABLE OF CONTENTS
II
-­‐
First
Funding
–
Funding
Lifecycles
1. Assump9ons
&
Caveats
2. Funding
Cycles
>
The
Seed
Cycle
3. Goals
Alignment
4. Necessary
Ingredients
5. The
“Pitch”

4. MY BACKGROUND
• Educated
as
an
Engineer
Ö Electrical,
BioMedical,
Computer
Science
Ö USC,
Stanford,
NASA
• Involved
in
Tech
Startups
past
20+
years
• mostly
as
a
Business
Execu@ve
–
Sales,
Marke@ng,
CEO
• Also
some
Non-­‐Tech
• Deep
Understanding
of
SoQware
and
Systems
Architectures
Ö Internet,
Real-­‐@me,
Social
Graph,
Seman@c,
Data
Mining,
AI,
Machine
Learning
Ö App
Dev
Tools
Design
-­‐
C++/Java/OOP,
Simula@on,
Network
Ö 3D
Graphics,
Semiconductor,
MP

5. STARTUP EXECUTIVE MGMT EXPERIENCE
• Have
led
5
Startups
as
CEO,
3
as
VP
Sales/Marke9ng
• 2
IPOs,
20+
Acquisi@ons,
2
Liquida@ons
• Have
worked
in…
• Silicon
Valley
-­‐
Palo
Alto,
Mountain
View,
San
Jose,
San
Francisco,
Berkeley,
Pleasanton
• Other
–
L.A.,
Portland,
Corvallis,
Boulder,
New
Mexico,
Aus@n,
Salt
Lake
City,
Cambridge,
NYC,
Europe
• Currently
Startup
Consultant
in
Launch,
Funding,
Organic
Growth,
M&A,
IPO,
Board
Development

6. CURRENT WORK
Ö Consul9ng
–
1
project,
looking
for
1
more
Ö Non-­‐Profit
work
Ö Get
Good
Karma
Now
–
plaYorm
for
NPOs
• getgoodkarmanow.com
Ö Helping
build
the
So
Cal
Startup
world
• This
group,
Advisor,
Incubators,
SW
Engineer
Club
• Launch
Co-­‐Working
/
Incubator
space
?
2013?
Ö Stealth
Project
=
future
of
Job
Seeking
Ö Looking
for
partners

7. ASSUMPTIONS
• Up
and
Running
• Building
for
Growth
• “Investor-­‐Ready”
Ö Strategy,
Presenta@ons,
Financials,
Early
Fans,
Demos
Ö You’re
Ac9vely
Looking
for
Ini9al
Funding
• The
Seed
Round,
First
Money,
Post
F&F
• More
Than
1
Person,
“2+”
is
best
• You
Truly
Believe
Ö That
you
have
an
amazing
idea
&
path
to
success
• L.A.
Startup
Scene
will
get
more
like
Silicon
Valley
Ö More
Real
Companies!
(Tech
and
Non-­‐Tech)

8. CAVEATS
This
Talk
is
Oversimplified,
Idealized
My
Opinions,
Experiences
Hopefully
Foster
Conversa9on,
New
Cos.
Here
This
Is
A
Very
Small
Part
of
the
Whole
Puzzle

9. SO HERE WE GO…

10. HOW FUNDING CYCLES WORK
• Usually
Mul9ple
Rounds
Ö Seed
-­‐
then
Round
1
or
A
…
Round
2
or
B
…
Ö Loans,
Mezzanine,
IPO,
Sale,
(Liquida@on)
Ö The
Dream
is
One
Round
then
Profitable
Growth
Ö Every
One
Is
Different,
Some
Ain’t
Preey
• Forcing
Factors
=
Valua9on
vs.
Cash
on
Hand
• Can
Go
Several
Years
Between
Rounds

11. WHAT INVESTORS DESIRE
• Strong
Revenue
Growth
• Exponen9al
Valua9on
Growth
Valua9on
Revenue
Seed
A
B

12. MORE TYPICAL
• S@ll
Fundable
Revenue
Valua9on

13. SEED = THE FIRST MONEY IN…
• =
Seed
Round,
Angel
Round,
Friends
&
Family,
etc.
• Usually
Pre-­‐Revenue
• The
Cleanest
round
• Most
Expensive
Round
(Equity)
• Anywhere
from
~$250K
to
$5
Million
in
Tech
Ö In
L.A.
$250K
to
~$2
Million
Ö many
deals
currently
in
L.A.
• Some
Pre-­‐Seed
these
days
-­‐
low
$$
(not
usually
good)
• Your
First
Major
Milestone
Ö We’re
a
Real
Company
Now
Ö Credibility,
In
The
Club

14. PURPOSE OF SEED ROUND
• Catalyst
-­‐
Get
Things
Started,
Accelerate
• Get
an
Office
• Travel
• Pay
Consultants,
Contractors
• Build
Out
Prototype,
Proof
of
Concept
• Market
Launch
• (Maybe)
Pay
Salaries
Boiom
Line
Goal
=
Get
it
to
Next
Level,
Next
Round

15. SOURCES OF SEED FUNDING
• Friends
&
Family,
Customer
• Ins9tu9onal,
Government
• Angel
• Super
Angels
Ö Facebook
–
Peter
Thiel
+
Reid
Hoffman
-­‐
$500K
• New!
-­‐
Crowdfunding
• Kickstarter,
indiegogo,
crowdfunder
(L.A.
based)
The
Big
Leagues
• Venture
Funds
Ö Wide
Range
Here
–
Tier
I,
II,
III
Ö “Baby
Seed
Funds”
inside
VC
Funds

16. NECESSARY INGREDIENTS
• BIG
Market
• Convincing
Scalability
Story
Ö VCs
and
Angels
need
High
Growth
Ö 10x
ROI
Opportunity
–
very
important
• Charter,
Goals,
Objec9ves
• Market
Understanding
Ö Ready
to
Answer
Most
Ques@ons
• Support
System
• Experienced
Advisors,
Fans,
Friends,
This
Group
• Most
Common
Missing
Piece
• Readiness
+
Enthusiasm
of
all
Founders
Ö Timing
Is
Everything
Ö The
“Day”
Job(s)?

17. MORE NECESSARY INGREDIENTS
• Technology
Roadmap
• Understanding
your
Valua9on
Ö Need
to
Research,
Discuss,
Be
Comfortable
• Adaptability
Ö Funding
Sources
will
have
other
op@ons
Ö Things
Change
OQen
around
you
Ö They
will
call
you
on
what
you
said
6
months
ago
• Tough
Skin
Ö VCs
and
Angels
can
be
Brutal
Ö Many
Great
Startups
were
Discouraged
• Timing,
Orchestra9on

18. CALCULATING & NEGOTIATING VALUATION
(Startups
Almost
Always
undervalued
first
@me
out)
• Get
Help
Here
–
Support
System,
Experts
• Cover
All
The
Bases
• Respect
PR,
Marke9ng
• Leverage
SM
• Passion
• Don’t
Lose
Control
of
the
Room

19. HOW TO MAXIMIZE VALUATION
• Always
Strive
for
Uniqueness
Unproven
You’re
Uniqueness, Amazingness - - - >
Get
Trac9on
Soon!
Gold
(Google,
Apple)
X
Hard
To
Con9nue
Growth,
Lifestyle
Co.
(Zynga,
Groupon,
Yahoo,
LI)
Traction, Revenue - - - >

20. THE “PITCH”
• Control
The
Environment
• Cover
The
Usual
Ö Market
Size
>
Specific
Opportunity
Ö Product,
Service,
Other
Ö Corporate
Growth
Plan,
Exper9se
Ö Specific
Funding
Needed
• Team
Ö Sprinkle
these
people
all
over
the
pitch
Ö Support
System/“Family”

21. THE “PITCH”
• Keep
it
Real
• Less
Slides,
More
Discussion
Ö Move
on
to
Conversa9on
Quickly
Ö May
Never
Get
to
your
Slides
1st
Mee@ng
• Can
Take
Many
Forms
Ö Oqen
not
usually
an
actual
Pitch
• Show
Intensity/Focus
for
what
you’re
doing
• Be
ready
to
get
“swung
at”
• Most
Important
-­‐
-­‐
Chillax

22. WHY INVESTORS SAY NO
• The
Team
Ö Weak
Team
Members,
Incomplete
Ö Spooked,
Lack
Confidence
• Lack
of
Uniqueness,
Boring
Story
Ö Any
story
can
be
exci9ng
• Start
and
Stop,
lose
momentum
Ö Not
a
Real
Deal
• No
Support
System,
Valida9on

23. EXAMPLE - FACEBOOK 1 4 FUNDING ROUNDS
ST

24. PERSONAL EXAMPLE – ACTUAL REVENUE
EXPONENTIAL REVENUE GROWTH

25. PERSONAL EXAMPLE – ACTUALS
EXPONENTIAL REVENUE GROWTH
$8
M
Mezz
(Debt)
$100
M
val
4X,
20X
$4.2
M
A
Round
$25
M
val
$1.5
M
5X
SEED
$5
M
val

26. CONCLUSIONS
• Raising
a
Seed
Round
is
a
Sales
Job
Ö Respect
it
as
such
Ö Don’t
Duck
from
Nega9ve
Feedback,
but
know
when
not
to
follow
it
• Use
your
Support
Structure
Ö Validate
your
story
with
Experts,
Friends,
Associates
• Make
a
Schedule
and
Move
Fast
• Best
of
Luck

27. SEED MONEY

28. THANKS TO OUR SPONSORS & FRIENDS
Buchalter
Nemer
Mai
Seror,
Judith
Gordon,
others
buchalter.com
SignNow
Kleverdog
SilBeach.com
Blue
Pecos
Consul9ng
Trojan
Entrepreneur
USC
Dept
of
Computer
Science

29. CONTACT INFO:
TOM NORA
- - - -
Email: tomnora2020@gmail.com Phone: 310.855.2199
Connect with me on:
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Twitter: @tomnora @cowlow