VC fundraising is a sales process that requires careful planning and execution. It involves four key steps: 1) preparing an investable company with paying customers; 2) approaching the right VCs at the right time, after customer validation; 3) pitching the investment opportunity; and 4) undergoing due diligence. The document provides tips for startups on how to successfully navigate each step to raise funding from venture capitalists.
This was a presentation I delivered to the Gdynia Business Week program in August 2012. GBW teaches high school students critical business, teamwork and leadership skills at an early age.
Ecosystem Environment for Starting a Semiconductor CompanySteve Szirom
Management presentation on the complex ecosystem necessary for a successful semiconductor startup. Covers key issues: marketing, finacial, legal, PR, funding, and technology.
Insiders Guide On How To Raise Venture CapitalBob Dahlberg
This presentation is based on my six years as an entrepreneur during which I raised over $30M in venture capital, and six years as a VC writing checks to entrepreneurs. This guide describes a process on how to successfully raise money from any investor. It goes way beyond elevator and first pitch advice. Good luck!
This was a presentation I delivered to the Gdynia Business Week program in August 2012. GBW teaches high school students critical business, teamwork and leadership skills at an early age.
Ecosystem Environment for Starting a Semiconductor CompanySteve Szirom
Management presentation on the complex ecosystem necessary for a successful semiconductor startup. Covers key issues: marketing, finacial, legal, PR, funding, and technology.
Insiders Guide On How To Raise Venture CapitalBob Dahlberg
This presentation is based on my six years as an entrepreneur during which I raised over $30M in venture capital, and six years as a VC writing checks to entrepreneurs. This guide describes a process on how to successfully raise money from any investor. It goes way beyond elevator and first pitch advice. Good luck!
Raising startup capital - fundraising as a process general assembly sf oct 4...VentureArchetypes LLC
How-to guide on raising startup capital (VC, angel, seed) as a structured process. Part of a 3-part lecture series given at General Assembly in San Francisco by Nathan Beckord, Founder of www.venturearchetypes.com
Kennet - Growth Strategies For Bootstrapped Companiessujohnston
Kennet works with Hi-tech entrepreneurs, and the companies they build with little or no outside funding. This slideshow explores how such compaies focus on rapid, affordable growth and how they can identify when it's the right time to seek external funding.
how can i use my minded pi coins I need some funds.DOT TECH
If you are interested in selling your pi coins, i have a verified pi merchant, who buys pi coins and resell them to exchanges looking forward to hold till mainnet launch.
Because the core team has announced that pi network will not be doing any pre-sale. The only way exchanges like huobi, bitmart and hotbit can get pi is by buying from miners.
Now a merchant stands in between these exchanges and the miners. As a link to make transactions smooth. Because right now in the enclosed mainnet you can't sell pi coins your self. You need the help of a merchant,
i will leave the telegram contact of my personal pi merchant below. 👇 I and my friends has traded more than 3000pi coins with him successfully.
@Pi_vendor_247
Financial Assets: Debit vs Equity Securities.pptxWrito-Finance
financial assets represent claim for future benefit or cash. Financial assets are formed by establishing contracts between participants. These financial assets are used for collection of huge amounts of money for business purposes.
Two major Types: Debt Securities and Equity Securities.
Debt Securities are Also known as fixed-income securities or instruments. The type of assets is formed by establishing contracts between investor and issuer of the asset.
• The first type of Debit securities is BONDS. Bonds are issued by corporations and government (both local and national government).
• The second important type of Debit security is NOTES. Apart from similarities associated with notes and bonds, notes have shorter term maturity.
• The 3rd important type of Debit security is TRESURY BILLS. These securities have short-term ranging from three months, six months, and one year. Issuer of such securities are governments.
• Above discussed debit securities are mostly issued by governments and corporations. CERTIFICATE OF DEPOSITS CDs are issued by Banks and Financial Institutions. Risk factor associated with CDs gets reduced when issued by reputable institutions or Banks.
Following are the risk attached with debt securities: Credit risk, interest rate risk and currency risk
There are no fixed maturity dates in such securities, and asset’s value is determined by company’s performance. There are two major types of equity securities: common stock and preferred stock.
Common Stock: These are simple equity securities and bear no complexities which the preferred stock bears. Holders of such securities or instrument have the voting rights when it comes to select the company’s board of director or the business decisions to be made.
Preferred Stock: Preferred stocks are sometime referred to as hybrid securities, because it contains elements of both debit security and equity security. Preferred stock confers ownership rights to security holder that is why it is equity instrument
<a href="https://www.writofinance.com/equity-securities-features-types-risk/" >Equity securities </a> as a whole is used for capital funding for companies. Companies have multiple expenses to cover. Potential growth of company is required in competitive market. So, these securities are used for capital generation, and then uses it for company’s growth.
Concluding remarks
Both are employed in business. Businesses are often established through debit securities, then what is the need for equity securities. Companies have to cover multiple expenses and expansion of business. They can also use equity instruments for repayment of debits. So, there are multiple uses for securities. As an investor, you need tools for analysis. Investment decisions are made by carefully analyzing the market. For better analysis of the stock market, investors often employ financial analysis of companies.
Raising startup capital - fundraising as a process general assembly sf oct 4...VentureArchetypes LLC
How-to guide on raising startup capital (VC, angel, seed) as a structured process. Part of a 3-part lecture series given at General Assembly in San Francisco by Nathan Beckord, Founder of www.venturearchetypes.com
Kennet - Growth Strategies For Bootstrapped Companiessujohnston
Kennet works with Hi-tech entrepreneurs, and the companies they build with little or no outside funding. This slideshow explores how such compaies focus on rapid, affordable growth and how they can identify when it's the right time to seek external funding.
how can i use my minded pi coins I need some funds.DOT TECH
If you are interested in selling your pi coins, i have a verified pi merchant, who buys pi coins and resell them to exchanges looking forward to hold till mainnet launch.
Because the core team has announced that pi network will not be doing any pre-sale. The only way exchanges like huobi, bitmart and hotbit can get pi is by buying from miners.
Now a merchant stands in between these exchanges and the miners. As a link to make transactions smooth. Because right now in the enclosed mainnet you can't sell pi coins your self. You need the help of a merchant,
i will leave the telegram contact of my personal pi merchant below. 👇 I and my friends has traded more than 3000pi coins with him successfully.
@Pi_vendor_247
Financial Assets: Debit vs Equity Securities.pptxWrito-Finance
financial assets represent claim for future benefit or cash. Financial assets are formed by establishing contracts between participants. These financial assets are used for collection of huge amounts of money for business purposes.
Two major Types: Debt Securities and Equity Securities.
Debt Securities are Also known as fixed-income securities or instruments. The type of assets is formed by establishing contracts between investor and issuer of the asset.
• The first type of Debit securities is BONDS. Bonds are issued by corporations and government (both local and national government).
• The second important type of Debit security is NOTES. Apart from similarities associated with notes and bonds, notes have shorter term maturity.
• The 3rd important type of Debit security is TRESURY BILLS. These securities have short-term ranging from three months, six months, and one year. Issuer of such securities are governments.
• Above discussed debit securities are mostly issued by governments and corporations. CERTIFICATE OF DEPOSITS CDs are issued by Banks and Financial Institutions. Risk factor associated with CDs gets reduced when issued by reputable institutions or Banks.
Following are the risk attached with debt securities: Credit risk, interest rate risk and currency risk
There are no fixed maturity dates in such securities, and asset’s value is determined by company’s performance. There are two major types of equity securities: common stock and preferred stock.
Common Stock: These are simple equity securities and bear no complexities which the preferred stock bears. Holders of such securities or instrument have the voting rights when it comes to select the company’s board of director or the business decisions to be made.
Preferred Stock: Preferred stocks are sometime referred to as hybrid securities, because it contains elements of both debit security and equity security. Preferred stock confers ownership rights to security holder that is why it is equity instrument
<a href="https://www.writofinance.com/equity-securities-features-types-risk/" >Equity securities </a> as a whole is used for capital funding for companies. Companies have multiple expenses to cover. Potential growth of company is required in competitive market. So, these securities are used for capital generation, and then uses it for company’s growth.
Concluding remarks
Both are employed in business. Businesses are often established through debit securities, then what is the need for equity securities. Companies have to cover multiple expenses and expansion of business. They can also use equity instruments for repayment of debits. So, there are multiple uses for securities. As an investor, you need tools for analysis. Investment decisions are made by carefully analyzing the market. For better analysis of the stock market, investors often employ financial analysis of companies.
The secret way to sell pi coins effortlessly.DOT TECH
Well as we all know pi isn't launched yet. But you can still sell your pi coins effortlessly because some whales in China are interested in holding massive pi coins. And they are willing to pay good money for it. If you are interested in selling I will leave a contact for you. Just telegram this number below. I sold about 3000 pi coins to him and he paid me immediately.
Telegram: @Pi_vendor_247
The Evolution of Non-Banking Financial Companies (NBFCs) in India: Challenges...beulahfernandes8
Role in Financial System
NBFCs are critical in bridging the financial inclusion gap.
They provide specialized financial services that cater to segments often neglected by traditional banks.
Economic Impact
NBFCs contribute significantly to India's GDP.
They support sectors like micro, small, and medium enterprises (MSMEs), housing finance, and personal loans.
BYD SWOT Analysis and In-Depth Insights 2024.pptxmikemetalprod
Indepth analysis of the BYD 2024
BYD (Build Your Dreams) is a Chinese automaker and battery manufacturer that has snowballed over the past two decades to become a significant player in electric vehicles and global clean energy technology.
This SWOT analysis examines BYD's strengths, weaknesses, opportunities, and threats as it competes in the fast-changing automotive and energy storage industries.
Founded in 1995 and headquartered in Shenzhen, BYD started as a battery company before expanding into automobiles in the early 2000s.
Initially manufacturing gasoline-powered vehicles, BYD focused on plug-in hybrid and fully electric vehicles, leveraging its expertise in battery technology.
Today, BYD is the world’s largest electric vehicle manufacturer, delivering over 1.2 million electric cars globally. The company also produces electric buses, trucks, forklifts, and rail transit.
On the energy side, BYD is a major supplier of rechargeable batteries for cell phones, laptops, electric vehicles, and energy storage systems.
when will pi network coin be available on crypto exchange.DOT TECH
There is no set date for when Pi coins will enter the market.
However, the developers are working hard to get them released as soon as possible.
Once they are available, users will be able to exchange other cryptocurrencies for Pi coins on designated exchanges.
But for now the only way to sell your pi coins is through verified pi vendor.
Here is the telegram contact of my personal pi vendor
@Pi_vendor_247
Even tho Pi network is not listed on any exchange yet.
Buying/Selling or investing in pi network coins is highly possible through the help of vendors. You can buy from vendors[ buy directly from the pi network miners and resell it]. I will leave the telegram contact of my personal vendor.
@Pi_vendor_247
Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...Vighnesh Shashtri
In India, financial inclusion remains a critical challenge, with a significant portion of the population still unbanked. Non-Banking Financial Companies (NBFCs) have emerged as key players in bridging this gap by providing financial services to those often overlooked by traditional banking institutions. This article delves into how NBFCs are fostering financial inclusion and empowering the unbanked.
how to sell pi coins at high rate quickly.DOT TECH
Where can I sell my pi coins at a high rate.
Pi is not launched yet on any exchange. But one can easily sell his or her pi coins to investors who want to hold pi till mainnet launch.
This means crypto whales want to hold pi. And you can get a good rate for selling pi to them. I will leave the telegram contact of my personal pi vendor below.
A vendor is someone who buys from a miner and resell it to a holder or crypto whale.
Here is the telegram contact of my vendor:
@Pi_vendor_247
how to sell pi coins on Bitmart crypto exchangeDOT TECH
Yes. Pi network coins can be exchanged but not on bitmart exchange. Because pi network is still in the enclosed mainnet. The only way pioneers are able to trade pi coins is by reselling the pi coins to pi verified merchants.
A verified merchant is someone who buys pi network coins and resell it to exchanges looking forward to hold till mainnet launch.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
3. Agenda
Venture Capital financing Caveats
n
Raising money is a sales process
n
Four steps to falling in love
n
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 3
4. Full Disclosure: VC Costs… †
False sense of security: masks viability
n
Fund raising takes time away from serving
n
customers
Adds an additional set of masters
n
Money enables costly mistakes
n
Money removes spending discipline
n
Sets the exit strategy and timing
n
You give up a lot of ownership
n
† Source: Greg Gianforte, CEO RightNow, http://cet.berkeley.edu/Resources/CETLectures.html
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 4
5. Venture Capital Isn’t Required
To Build a Great Business …
Broadcom
n
No VC money
n
Cisco
n
$5M in revenue, profitable before Sequoia invested
n
Dell
n
Raised money at $60M in revenue
n
eBay
n
$4.5M in revenue and profitable before Benchmark
n
invested
Microsoft
n
VC funded after being profitable
n
The MathWorks
n
>$300M in revenue, no VC money
n
Oracle
n
Government contract funded first product
n
SAS Institute
n
> $1.9B in revenue, the largest private software
n
company, no VC money
Siebel
n
Customers funded first product
n
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 5
6. … But it Can Sure Help
Cash to fuel growth
1.
Cash to fuel growth
2.
Strategy / business advice
3.
Introductions: VCs, customers partners
4.
Recruiting
5.
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 6
7. Agenda
Venture Capital financing Caveats
n
n Raising money is a sales process
Four steps to falling in love
n
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 7
8. Fundraising = Selling an Investment
It’s likely to be the biggest sale of your life
n
Success demands careful planning and
n
execution
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 8
9. Fundraising is a Grueling Process
1. Requires mental toughness
2. You may have to talk to 10 – 40 firms to find
the match
3. It’s the best business advice you will get!
§ Listen
§ Learn
§ Accept it
§ Bake learnings into your business plan
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 9
10. The Classic Enterprise Sales Process
Initiate Educate/ Justify
Discovery Evaluate Validate
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 10
11. Fundraising is a 4 Step Sales Process
Initiate Educate / Justify
Discovery Evaluate Validate
4
1 2 3
Due
Prepare Approach “The Pitch”
Diligence
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 11
12. Time Scales
4
1 2 3
Due
Prepare Approach “The Pitch”
Diligence
1 to 6 weeks
Per VC
2 to 12 weeks
Per VC
2 to 26 weeks
Per Funding
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 12
13. Agenda
Venture Capital financing Caveats
n
Raising money is a sales process
n
n Four steps to falling in love
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 13
14. Step 1: Prepare
Goal: Build an investable company
n
Strategy: Understand the VC’s Mind
n
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 14
15. VC Problem #1
Deliver BIG returns to their Limited Partners in an
n
out of favor investment sector
HUNGRY to do GOOD deals
n
40.0
30.0
20.0
10.0
0.0
-10.0
-20.0
2000 2001 2002 2003 2004 2005 2006
VC Return PE Return
Source: Cambridge Associates
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 15
16. VC Problem #2
“We kiss a lot of frogs to
find the prince”
-- Venture capital industry cliché
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 16
17. Venture Grade Deals are Rare
% 2003 Corporate Tax Returns by
Revenue
100%
81.8%
80%
5.4M Returns
Percent of
60%
Life Style Companies VC
Grade
AKA “Walking Dead”
40%
13.6%
20%
0.5%
2.2% 1.9%
0%
< $1M < $5M < $10M < $50M >$50M
Revenue
Source: IRS.gov
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 17
18. VC Problems #3, 4, 5
No one can pick which start up will make it
n
Every deal has “hair on it” – it’s easy to find problems
n
Portfolio returns: 1 @ 10X; 4 @ 2X; 5@1X; 10 @0X
n
=> VC will rely on their gut in the end
n
Will be working together for 6+ years
n
It has to be an interesting project
n
There has to be compatibility with the team
n
The unexpected is going to happen
n
Got to get through the hard times
n
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 18
19. So How do Most VCs Decide?
VCs “fall in love” with the deal
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 19
20. So the Start-Up Must Be Attractive
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 20
21. Attractive in 2008 Is
Big Market
n
Open to disruption
n
Customers in pain and who buy
n
Growing order trend
n
Strong product offering / technology
n
Differentiated, protected
n
Successful Team
n
“A Players”
n
Successful Investors / Advisors / Board Members
n
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 21
22. #1 Start-Up Failure is the
Lack of (high) Paying Customers
Know your customer!
n
n Walk in your customer’s shoes
n Know why they will buy
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 22
23. Dot Bomb School
“Build it and they will come!”
n
Product Development Model
n
Concept/ Product Alpha/beta
FCS
Bus. Plan Dev. Test
“Get big fast”
n
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 23
24. New School
Customer Development Model †
Customer Customer Customer Company
Discovery Validation Creation Scale
† Steve Blank, The Four Steps to the Epiphany.
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 24
25. Customers that are Buying is
The Essential Investment Criteria
www.cafepress.com/kandsranch
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 25
26. Step 2: Approach
n Goal: Get the first meeting
n Strategy: Approach the right VC, right
Due
Prepare Approach “The Pitch”
Diligence
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 26
27. The Right VC, Right
1. Right VCs,
2. Right Time,
3. The Right Way
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 27
28. 1. The Right VC
has Greener Money
VC money is not a bank loan
n
Do your homework!
n
Talk to start-up CEOs
n
n Actively investing
n Fund has money
n VC has capacity (not too many board seats)
Right sector (life sciences vs. semiconductor)
n
n Relevant portfolio, expertise, and synergies
n Early vs. late stage
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 28
29. Approach the Right VC, Right
1. Right VCs,
2. Right Time,
3. The Right Way
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 29
30. 2. The Right Time - 1
“Seek financing
on the backside
of a milestone”
– John Hall,
Horizon Ventures
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 30
31. 2. The Right Time - 2
“VC money is very expensive fuel to be
used for taxiing around an airport.”
– Peter Rip, Crosslink Capital
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 31
32. 2. The Right Time - 3
Seek VC financing after Customer Validation
n
Funding
“Taxiing Phase”
Customer Customer Customer Company
Discovery Validation Creation Scale
† Steve Blank, The Four Steps to the Epiphany.
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 32
33. Software Seed Rounds Fell 27% YoY
Software VC Investments by Company Stage
400
350
300
250 Seed
Early Stage
200
Expansion
150
Later
100
50
0
2004 2005 2006 2007(75%)
• Early Stage company investments increased 28% YoY.
• Expansion company investments decreased 15% YoY and 20% from 2004.
Source: PricewaterhouseCoopers/Thomson Venture Economics/National Venture Capital Association MoneyTree™Survey
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 33
34. Funding to Customer Validation
Customers
n
Consulting engagements
n
Non-Recurring Engineering (NRE) engagements
n
Retainer fees from customers
n
Government
n
Small Business Innovation Research Grants (SBIR)
n
Big Companies
n
Value-Added Reseller (VAR) agreements
n
Divestitures – protected supplier contract with parent for a
n
defined period
Moonlighting
n
Founders waive compensation
n
Family, Friends and Fools
n
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 34
35. Approach the Right VC, Right
nRight VCs,
nRight Time,
nThe Right Way
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 35
36. The Right Way
“We only look at deals that are
introduced to us by people we know”
– Mike Schuh, Foundation Capital
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 36
37. The Right Way:
Introduction by Referral
Successful entrepreneurs
1.
Lawyers that work with VCs and start-ups
2.
Angel investors
3.
Other service providers:
4.
bankers, head hunters, …
n
Avoid Brokers (= Mothers-in-Law)
Create a buffer layer in between you and VCs.
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 37
38. Sales Tool:
The Executive Summary
Tool Objective: To get a meeting
n
One pager that covers:
n
Contact information
n
Customer problem
n
Your solution (product/technology)
n
Market size
n
Competitors
n
Team
n
Customer proof points
n
Funding status
n
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 38
39. Executive Summary Template
Company Overview: Logo
Tagline
Pain:
Solution :
Technology
Company Information:
Newco, Inc.
Address :
Phone:
Fax:
Website:
Email
Basic Details:
Founded In: Defensibility
# Of Employees: 15 (X US / Y off shore)
Funding History:
Total Amount Raised to Date:
Funding History:
Total Seeking: $ Raised to Date:
Total Amount
Participants Amount
Individuals:
Committed Funds (If Any):
VCs:
Competition
Others:
Use of funds: E
Valuation Expectations:
Total Seeking:
Committed Funds (If Any):
Use of funds:
Financials:
Cumulative Revenue:
Burn Rate: $
Cash Flow Positive in: Year ?
Business Model
3-Year Revenue Forecast:
Year 1: $
Year 2: $
Year 3: $
Team:
Milestones
• Company founded ____
• ___ Patents filed on ___
• Product Introduction ____
• $ in sales in x
• $ in sales in x+1
• $ in sales in x + 2
www.bandangels.com
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 39
40. How VCs Vet
Your Exec Summary
Is the referral source credible?
n
Is this company in my geography?
n
< 1 -2 hours travel time
n
Is this a scalable business?
n
Is the team credible?
n
Are the existing investors credible?
n
Can I possibly love the:
n
CEO
n
Target market
n
Problem being solved
n
The technology being developed
n
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 40
42. Rejection
“We can’t kiss all the pretty girls”
-Bob Kagle, Benchmark
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 42
43. Step 3: The Pitch
Goal: Get follow-on meetings
n
Strategy: Sketch out a compelling,
n
exciting picture
4
1 2 3
Due
Prepare Approach “The Pitch”
Diligence
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 43
44. PowerPoint “Pitch” Advice
is Abundant
SVASE
n
www.svase.org/components/uploads/SVASE%2010%20Sli
de%20Template.ppt
David Cowan, Bessemer Venture Partners
n
whohastimeforthis.blogspot.com/2005/11/how-to-not-write-
business-plan.html
Brad Feld, Mobius Venture Capital
n
www.feld.com/blog/archives/2004/06/the_torturous_w.html
Guy Kawasaki, Garage Technology Ventures
n
blog.guykawasaki.com/2005/12/the_102030_rule.html
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 44
45. Your Goal:
Get the Next Date
Tell a simple yet compelling story
n
VCs easily drown in details
n
Your key points get forgotten
n
Boredom sets in
n
Listen and learn
n
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 45
46. K.I.S.S. Principle:
Tell a Simple Story
Avoid 3 Blind VCs and (You’re) the
n
Elephant
n Too common at first VC meetings:
You know your business best
n
n Assume nothing!
VC Start-Up
K.I.S.S. = Keep it Simple Stupid
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 46
47. Peter Lynch’s Investment Advice
“Never invest in
any idea you
can't illustrate
with a crayon.”
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 47
48. Jerry Weissman Coach to
IPO Road Show CEOs
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 48
49. Expect to Go off the Rails
1. VCs are curious, smart and impatient
They will ask a lot of questions when confused
n
2. VCs are testing you:
Are you an effective leader?
n
Able to listen to “board room” feedback?
n
Able to listen to customer feedback?
n
Re-arrange the slide order to address
n
issues that come up early
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 49
50. Listen Carefully!
It’s the best business advice you will get!
n
§ Listen
§ Learn
§ Accept it
§ Bake learnings into your business plan
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 50
51. Four Reasons for Love
Market
+
Team Technology Financials
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 51
52. 1. Market Size is Every VC’s Concern
Is the market big enough to build a big
n
company?
n Is there any potential to grow fast?
n Is there room for this start-up?
n Is the market big enough to maneuver
if the first niche doesn’t work out?
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 52
53. 1. Lack of Customers
is the #1 Cause of Failure
Does the team really know the customer?
n
Is there a logical reason behind the
n
customer list?
Strategic or opportunistic?
n
n Any notion of customer segmentation?
Are the customers tier 1?
n
How much are the customers helping?
n
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 53
54. 2. Team
Every team claims to be “world class”
n
Demonstrate Success
n
Company pedigree – worked at market leaders
n
n Personal results
n Personal success
n Start -up mentality vs. Big company mentality
Expect your backgrounds to be rigorously
n
checked.
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55. 3. Product Test:
Aspirin or Vitamin??
Inertia is huge
n
Customers change only when they have to
n
“Don’t fix what isn’t broke.”
n
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56. 3. Product
Feature or a Company?
A Feature?
n
n Can the incumbent add this feature to an
existing product easily?
A Product?
n
n Part of a full-product portfolio?
A Company?
n
n Canthe value prop create a substantial
business?
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57. 4. Financial Forecasts
“I don’t have Excel on my computer!”
-- Mark Stevens, Sequoia Capital
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58. Cash flow is king
Revenue forecast will likely not materialize, So
n
n Is this plan realistic?
n Revenue must not be too big, but not too small
Spending plan will be scrutinized.
n
n Cash is King
n Successful CEOs are frugal
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59. The Morning After …
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 59
60. What Can You Do?
React to the business advice you received
n
Adjust your business strategy as is necessary
n
Polish your pitch for the next VC
n
Incorporate learning from each interaction
n
n Simplify, Simplify
n Clarifyconfusing points
n Address objection items
n Rearrange the slide order
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61. What Will Most VCs Do?
Go silent or an innocuous turn down
n
They don’t want to burn any bridges
n
Go at their own pace, no urgency
n
Risk reduces as time passes
n
n Wait for a milestone
n quartersales results
n prototype works
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62. Rejection
Accept rejection gracefully
n
There is no rationale argument to bring the
n
VC back
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63. What Might Happen?
When a VC senses love, you’ll hear back
n
Be responsive!
n
VC’s like working with responsive people
n
n You’re building a relationship
n Respond to requests < 24 hours
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64. Step 4: Due Diligence
n Goal: Get a term sheet
n Strategy: Two way test drive
Due
Prepare Approach “The Pitch”
Diligence
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65. Due Diligence =
Two Way Test Drive
Can I work with this team / VC for the next
n
6 years?
Is this a quality team / VC?
n
Do team / VC listen?
n
Is the team/VC honest, ethical, reliable?
n
dependable?
How do they react being under fire?
n
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66. Prepare in Advance
Customer / technology references
n
Keep references updated on your progress
n
n Use them judiciously
Executive resumes & references
n
Line up references in advance,
n
n Contact people VCs will find
Financial Quarterlies
n
Capitalization table
n
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67. Typical Due Diligence Process
More information (Exec. resumes, financials, cap table,
n
personal references, etc.)
Meet with VC’s “expert(s)”: Portfolio
n
companies, friends, paid experts
Follow up meeting(s) at your office / their
n
office
Calls to customers and personal references
n
Calls to back-channel references
n
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68. Getting “Married”
Locate a Syndicate Partner
n
Term Sheet
n
Legal due diligence
n
Cash in the bank
n
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69. Syndication:
Two Parents are Better than One
For the entrepreneur
n
More strategic minds around the table
n
n Hedge against one VC walking out
For the VC
n
Validates that the start up has legs
n
n More powder available
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70. And Remember…
Venture Capital Isn’t Required
Broadcom
n
n No VC money
Cisco
n
n $5M in revenue, profitable before Sequoia
invested
Dell
n
n Raised money at $60M in revenue
eBay
n
n $4.5M in revenue and profitable before
Benchmark invested
Microsoft
n
n VC funded after being profitable
The MathWorks
n
n >$300M in revenue, no VC money
Oracle
n
n Government contract funded first product
SAS Institute
n
n > $1.9B in revenue, the largest private software
company, no VC money
Siebel
n
n Customers funded first product
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71. Entrepreneur Resources
Law firm outreach
n
DLA Piper Venture Pipeline
n
www.venturepipeline.com
Fenwick & West LLP
n
“Darrell Kong” < dkong _ fenwick.com >
<dkong fenwick.com>
Orrick, Herrington & Sutcliffe LLP’s “Total Access”
n
quot;Chad Lynchquot; <clynch _ orrick.com>
<clynch orrick.com>
Pillsbury Winthrop Shaw Pittman LLP’s “Back Stage Pass”
n
kiran.kamboj _ pillsburylaw.com
Wilson, Sonsini, Goodrich, and Rosati
n
wsgr.com/WSGR/Display.aspx?SectionName=practice/venturecapital.htm
wsgr.com/WSGR/Display.aspx?SectionName=practice/venturecapital.htm
SDForum
n
www.sdforum.org
n
Silicon Valley Bank’s Venture Exchange
n
Shai Goldman, Director, sgoldman _ svb.com
n
SVASE, Silicon Valley Association of Startup Entrepreneurs.
n Entrepreneurs.
www.svase.org
The Enterprise Network of Silicon Valley
n
Tensv.org
Women’s Technology Cluster
n
www.wtc-
www.wtc-sf.org
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72. To Your New Venture
Success!
Feb. 4, 2008 Copyright 2007, 2008 Robert W. Dahlberg 72