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Startup Funding 101: How To Get Started, with Adeo Ressi
Meet Today’s Moderator Shahab Kaviani Co-Founder | CMO, Onevest • 10+ years as a startup founder • Previously co-founded CoFoundersLab and HyperOffice (exited) • Raised over $800k – including a portion via equity crowdfunding
Disclaimer
Securities offered through WealthForge, LLC. Member FINRA/SIPC Onevest Corporation ("Onevest") is not a registered broker-dealer and does not give investment advice with respect to any securities. All the startup offerings listed are offered by the applicable Issuer. Onevest has not taken any steps to verify the accuracy of the information provided on the offerings that are listed. Onevest takes no part in the negotiation of the transaction and no securities are executed through Onevest's platform. Onevest receives no compensation in connection with the purchase or sale of securities. Testimonials may not be representative of the experience of all clients. Testimonials are not a guarantee of future performance or success.
CAPABILITIES STATISTICS
50,000 Entrepreneurs and Investors 7,000 introductions per month Companies who have worked with Onevest have collectively raised over $100M in funding
Equity crowdfunding Founder-matching via website and events Connecting investors with promising startups Free live educational webinars
SUCCESSFUL MATCH SUCCESSFULLY RAISED
Boulder, CO Built their team on Onevest
Techstars Alumni
AusCn, TX Raised $750K w/ the help of Onevest
Capital Factory Alumni
The New World of Funding
Don’t Be Shooting Blanks
3 Sources of Capital
ITEM FOOLS ANGELS VCS
Full-time Team or Founders - 1 > 2
Proven Domain Expertise - PARTIAL YES
Functioning Prototype - YES YES
Initial Customer Adoption - YES STRONG
Finished Product - - YES
Proven Customer Use Cases - - YES
Monthly Growth >20% - - YES
AMOUNT $25-50K $250-750K $1.5-3.0 MM
Start Here
What to Expect
• 1 Full-time CEO Founder
• 20 Hours per Week
• During All Hours
• 3 to 6 Months
• $5,000 - $15,000 in Legal
• Economics
– Time Invested = 240 Hours
– Earning per Hour = > $1,000
set your strategy
your only goal is to find a lead
The Role of the Lead
• Complete diligence on your company
• Provide credibility to other angel investors
• Set financial terms of the investment
• Provide operating expertise and advice
1. Interest in Your Segment
2. Financial Resources
3. Time & Risk Readiness
Lead
30 Posers
20 Interested
10 Investors
1 Lead
you will get blacklisted by premature fundraising
get out there
attend every industry event
1 2
3
Lead Follow On Connector
build relationships
start by building interest, then convert to a lead
1.Meet 2.Invite to Coffee 3.News Update 4.Meet at Event 5.Dinner Invite 6.Funding Ask 7.News Update
1
2
3
4
5 6
7
Like
liho
od
to
Clo
se
Time
~ 50%
~ 1 Month
the goal of each meeting is to get to the next meeting
$75,000
Hard Circled
Soft Circled
$200,000
75% Likelihood
25% Likelihood
converting a lead
“Would you be interested in being an advisor
and leading the round?”
Compensate the Lead
• Offer an Advisor Position
– Only AFTER agreement to lead
– Start with off the Board, but Board Possible
• Offer Advisory Shares
– 0.5% to 2.5% in options that vest over 2 year
Propose the Terms
• Outline Terms to Lead
– Start with a friendly Convertible Debt Round
• Have Company Counsel Draft Term Sheet
– Reduce the costs of lead’s legal
• Produce the Final Agreements
– Simplify time required to lead
Build Buzz
• Plan a Series of Company Internal Milestones
– Ensure updates in a monthly newsletter
• Organize One Public Announcement before Close
– External validation is key, such as partnerships
• Ensure Metrics are Moving Up and to the Right
– Bad performance during fundraising can kill a deal
closing the deal
Needed to Close
• Strong company counsel engaged
• Agreed upon Term Sheet
• Minimum closing amount
• Minimum investment amount
• Initial closing date
• Maximum amount with a rolling close
The Round Composition
ITEM NUMBER TARGET MIN MIX
Lead Investor 1 1 $50,000 $500,000 +
Large Angels 0 - 5 1 $50,000 $250,000 +
Small Angels 0 - 10 3 $10,000 $25,000
Friends 0 - 3 0 $5,000 $10,000
TOTAL - 5 - 6 $250,000 $500,000
Equity or Convertible
ITEM EQUITY CONVERTIBLE
Term Sheet 3 Pages 1 Page
Closing Costs $15 - $25,000 $5 - $15,000
Position Preferred Owner Option
Control Board and Operations Requiring Capital
Negative Hard to Price Equity New
Positive Clear Ownership Easy and Fast
Valuation
ITEM LOW HIGH
Pre Money 1,000,000 5,000,000
Raise 150,000 1,000,000
Post Money 1,150,000 6,000,000
Option Pool 10% 20%
Ownership 13.0% 23.1%
Fully Dilluted 12.7% 19.6%
in closing…
There are no shortcuts.
Tips
• Be patient and build the relationship
• Don’t ask for investment if “no” is likely
• Investors will say “yes,” but will not fund you
• Practice and refine the pitch constantly
• Don’t give benefits until the deal is done
• Stick to the facts
• Don’t overpromise
Thank you! @founding
Next Steps
• Visit Onevest.com
• Visit Learn.Onevest.com
• Twitter: @onevest
• Facebook: /onevest