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STARTUP FUNDRAISING 101 Katherine Gaffney, MBA, CPA Founding Partner, Startup CFO
•CFO Advisory •Financial Planning •KPI Dashboards •Fundraising •Strategy Consulting
•Accounting •Board Reports •Resource Allocation •Investor Relations •Taxes
SERVICES
CLIENTS
FUNDRAISING 101 OVERVIEW
Why raise funds? Types of Investors Fundraising process Analyze your Business What investors want to see
FRIENDS & FAMILY
• Beware of ruining personal relationships • Only accept what someone can afford to lose • Convertible loan
ANGELS/SUPER ANGELS• LESS $$ ($25k-$250k) • 3-5 MONTH PROCESS • HNW INDIVIDUALS • FOCUS ON INDUSTRY EXPERTS
• MORE $$$$ • HIGHER EXPECTATIONS • LARGER NETWORK • GREATER DILUTION • RED TAPE
VENTURE CAPITAL
FUNDING STAGES
Friends & Family
Bootstrap
Operating: Prepaid revenue or AR Financing
Angels
Venture Capital
Venture Debt
Strategic Investors
Ideation
$0
Launch & Traction
$1M
Growth & Scale $5M
Breakout
>$5M
Established Growth >$MM
FULL-TIME CFO
PART-TIME CFOADVISOR
FUNDRAISING PROCESS • BUILD YOUR VALUE PROPOSITION • EXPECT 6 MONTH PROCESS • USE YOUR NETWORK FOR WARM INVESTOR INTROS • BUSINESS DEVELOPMENT PROCESS TOWARDS
INVESTORS • DON’T WAIT UNTIL YOU NEED $$$
INVESTOR DATINGExpertise
Brand
Support
Network
Stage
Location
Focus
•Create milestones around your objectives •How will you spend the money, Dev/Marketing/G&A? •12-18 months of runway •Beware of raising more than you need!
USE OF FUNDS
REQUIRED DOCUMENTS•EXECUTIVE SUMMARY •PITCH DECK •PRODUCT DEMO •FINANCIAL MODEL
• Vision • Problem • Solution • Demo • Market • Competition
• Team • Milestones • Traction • Financial slide • Use of funds
PITCH DECK
Level 2
Level 1
FINANCIAL PROJECTIONS: BOTTOM-UP
MILESTONE FUNDING/STAFFING
DEVELOPMENT & MARKETING SPEND TO SUPPORT GROWTH INITIATIVES
USER ACQUISITION/REVENUE BASED ON CHANNEL SPEND
FINANCIAL PROJECTIONS: TOP-DOWN
CALCULATE SHARE of TOTAL REVENUE
TOTAL MARKET SIZE with FOCUS ON SEGMENT
OPERATING EXPENSES as % of REVENUE
FINANCIAL SLIDES
• Revenue model • 5 year projections • Funding requirements • Use of funds
FUNDRAISING IS A JOURNEY NOT A
DESTINATION
IT’S ALSO WHEN THE HARD WORK BEGINS….
BRINGING IN A CFO EARLY
IN THE GAME WILL PAY FOR ITSELF MANY TIMES OVER
STARTUP CFO ROLES
THE ACCOUNTANT• Financials: P&L,
Balance Sheet, Cashflow • AP/ Bill payments • AR/Collections • Taxes: Income,
Franchise, Sales
THE FINANCIER• Equity vs Debt Analysis
• Fundraising: • Runs deal process
• Obtains loan/lease approval for company growth
• Revenue financing • Investor relations
THE CLOSER• SALES:
• Late Stage involvement
• The Heavy: • You can blame your
CFO for the terms and conditions
THE OPERATOR1. STRUCTURE 2. PROCESS 3. REPORTING 4. INSIGHT 5. ACTIONABLE
STEPS 6. REPEAT &
ITERATE FOR GROWTH
THE COST CUTTER• Maximize Spend ROI • Knows where to cut where it won’t affect the business
• Benchmarks against other startups: Salaries, CAC, Development, Rent,Insurance,Commissions
THE CONSIGLIERE• Strategize • Counsel:
• Initiative prioritization • Advise:
• Decision-making • Challenge the CEO
for thorough vetting
THE JACK OF ALL TRADES
• HR: Commission plans,
compensation packages, policies, culture, events
• IT: Drives information systems
• LEGAL: Contract review
THE STARTUP CFO1. Chief Fund Raising Officer 2. Chief Accounting Officer 3. Chief Operations Officer 4. Chief HR Officer 5. Chief I.T. Officer 6. Chief Risk Officer 7. Chief Strategy Officer 8. Chief Negotiation Officer
THANK YOU!
Katherine Gaffney, MBA, CPA
katherine@Xceleratefinancial.com www.xceleratefinancial.com
Instagram: xcelerateyourbusiness @xceleratef
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