Get Funded for Your Dream

Embed Size (px)

Citation preview

  • 8/14/2019 Get Funded for Your Dream

    1/20

    get funded for your dream

    get funded for your dream

    a crash course raising smart moneya crash course raising smart money

    a crash course raising smart moneya crash course raising smart money

    By Adeo Ressi, Founding Member of TheFunded.com

  • 8/14/2019 Get Funded for Your Dream

    2/20

    Gl oba l Venture Capita l StatisticsGl oba l Venture Capita l StatisticsGl oba l Venture Capita l StatisticsGl oba l Venture Capita l Statistics

    $60 Billion USD Annua lly Invested

    3,000 Companies Funded Annua lly

    3,800 VC Firms

    16,500 Professional Venture Capita lists

    $60 Billion USD Annua lly Invested

    3,000 Companies Funded Annua lly

    3,800 VC Firms

    16,500 Professional Venture Capita lists

  • 8/14/2019 Get Funded for Your Dream

    3/20

  • 8/14/2019 Get Funded for Your Dream

    4/20

    G reat Timing for YouG reat Timing for YouG reat Timing for YouG reat Timing for You

    Low Costs New Techno logies Open Source

    New Distribution Inexpensive Gl oba l Labor Poo l

    New Opportunities Web 2.0 Socia l Networking

    Strong Financing C limate

    Low Costs New Techno logies Open Source

    New Distribution Inexpensive Gl oba l Labor Poo l

    New Opportunities Web 2.0 Socia l Networking

    Strong Financing C limate

  • 8/14/2019 Get Funded for Your Dream

    5/20

    What Type of Company gets Financed?What Type of Company gets Financed?What Type of Company gets Financed?What Type of Company gets Financed?

    Big VisionG rowing Market

    New Approach

    New Techno logy

    Big VisionG rowing Market

    New Approach

    New Techno logy

    FacebookG oog le

    Microsoft / Yahoo

    Electronic Arts

    App le Computer

    FedEx / KinkosCisco

    and more

  • 8/14/2019 Get Funded for Your Dream

    6/20

  • 8/14/2019 Get Funded for Your Dream

    7/20

    Investor MotivesInvestor MotivesInvestor MotivesInvestor Motives

    Fund Returns - $$$

    Cheap Equity

    Partner Esteem

  • 8/14/2019 Get Funded for Your Dream

    8/20

    What to Expect when Fundraising?What to Expect when Fundraising?What to Expect when Fundraising?What to Expect when Fundraising?

    L ow High

    Management Effort 25% 50%

    Time to Close 4 mns 12 mns

    VCs Pitched 10 60

    Offers Received 1 5

    Equity Dilution 15% 45%

    Amount Raised $0.5 MM > $10 MM

  • 8/14/2019 Get Funded for Your Dream

    9/20

    Step 1: Choose a G ood Lawyer Step 1: Choose a G ood Lawyer Step 1: Choose a G ood Lawyer Step 1: Choose a G ood Lawyer

    Identify 3-4 Fundraising Firms

    Interview Firms Thorough ly What is the right corporate structure? How many VC dea ls have they done? How many VC firms can they introduce you to? How wi ll they protect your equity?

    Conf lict of Interest & Dec lining Honesty

    Identify 3-4 Fundraising Firms

    Interview Firms Thorough ly What is the right corporate structure? How many VC dea ls have they done? How many VC firms can they introduce you to? How wi ll they protect your equity?

    Conf lict of Interest & Dec lining Honesty

  • 8/14/2019 Get Funded for Your Dream

    10/20

    Step 2: The Throwaway PitchStep 2: The Throwaway PitchStep 2: The Throwaway PitchStep 2: The Throwaway Pitch

    Prepare your First Presentation 20 minutes long

    Push the Big Vision Push the differentiation Avoid detai led financia l discussions Avoid confidentia l information

    Take a First Throwaway Pitch Meeting Write everything down Watch for when your pitch disengages Ask what they liked and did not like

    Prepare your First Presentation 20 minutes long

    Push the Big Vision Push the differentiation Avoid detai led financia l discussions Avoid confidentia l information

    Take a First Throwaway Pitch Meeting Write everything down Watch for when your pitch disengages Ask what they liked and did not like

  • 8/14/2019 Get Funded for Your Dream

    11/20

  • 8/14/2019 Get Funded for Your Dream

    12/20

    Step 3: Prepare your ApproachStep 3: Prepare your ApproachStep 3: Prepare your ApproachStep 3: Prepare your Approach

    1. Introductory One Sheet

    2. Meeting PowerPoint

    3. Capita lization Tab le

    4. Working Financia l Mode l

    5. Competitive Landscape Ana lysis

    6. Pub lished Industry Research

    7. (Audited Financia ls, Patents, Etc.)

    1. Introductory One Sheet

    2. Meeting PowerPoint

    3. Capita lization Tab le

    4. Working Financia l Mode l

    5. Competitive Landscape Ana lysis

    6. Pub lished Industry Research

    7. (Audited Financia ls, Patents, Etc.)

  • 8/14/2019 Get Funded for Your Dream

    13/20

    Step 4: Shotgun AttackStep 4: Shotgun AttackStep 4: Shotgun AttackStep 4: Shotgun Attack

    G oa l: Pitch 30 Firms in 2 Weeks Expect 1/10 success ratio

    Expect investors to ta lkLeverage Law Firm, Friends, Associates G et introduced find a connection Set-up meetings over the phone or face-to-face Ensure a Partner is present the more the better

    Send out the One Sheet in Advance

    G oa l: Pitch 30 Firms in 2 Weeks Expect 1/10 success ratio

    Expect investors to ta lkLeverage Law Firm, Friends, Associates G et introduced find a connection Set-up meetings over the phone or face-to-face Ensure a Partner is present the more the better

    Send out the One Sheet in Advance

  • 8/14/2019 Get Funded for Your Dream

    14/20

    G ood SignsG ood Signs

    Thoughtfu l Questions

    Market Understanding

    Set Fo llow-up Items

    Interesting

    Meeting Partners

    Bad SignsBad Signs

    No Questions

    Market Size Ignorance

    No Further Steps

    Maybe or but

    Hand led by Associates

    Are they doing competitive research? Are they over ly concerned about traction?Do you sense a run-around?

  • 8/14/2019 Get Funded for Your Dream

    15/20

  • 8/14/2019 Get Funded for Your Dream

    16/20

    Step 5: NegotiateStep 5: NegotiateStep 5: NegotiateStep 5: Negotiate

    The First Term Sheet DO NOT ACCEPT IT !!! DO NOT NE G TIATE !!!

    Time is on your side Exc lusivity and expirations are tactics

    G oa l: The 2 nd / 3 rd Term Sheet Inform the interested parties Avoid the syndicated round

    Your Lawyers work for THEM Trust, but VERIFY

    The First Term Sheet DO NOT ACCEPT IT !!! DO NOT NE G TIATE !!!

    Time is on your side Exc lusivity and expirations are tactics

    G oa l: The 2 nd / 3 rd Term Sheet Inform the interested parties Avoid the syndicated round

    Your Lawyers work for THEM Trust, but VERIFY

  • 8/14/2019 Get Funded for Your Dream

    17/20

    Key Secondary TermsKey Secondary TermsKey Secondary TermsKey Secondary Terms

    G ood Bad

    L iq Preference 1x >3x

    Participation None Fu ll

    Inv Board Seats 1 >1

    Founder Vesting None 75%Option Pool 20%

  • 8/14/2019 Get Funded for Your Dream

    18/20

    Step 6: C lose the FinancingStep 6: C lose the FinancingStep 6: C lose the FinancingStep 6: C lose the Financing

    Diligence Prepare your references

    Say no when excessiveLega l The dea l is more important that you The DETAILS MATTER

    Have a Back-up P lan

    Diligence Prepare your references

    Say no when excessiveLega l The dea l is more important that you The DETAILS MATTER

    Have a Back-up P lan

  • 8/14/2019 Get Funded for Your Dream

    19/20

    Tips from the InsideTips from the InsideTips from the InsideTips from the Inside

    Do not outsource your fundraising

    Do your homework

    There is no Industry Standard

    There is no confidentia lity

    Understand exit scenarios

    Inform targets of progress during thenegotiation

    Do not outsource your fundraising

    Do your homework

    There is no Industry Standard

    There is no confidentia lity

    Understand exit scenarios

    Inform targets of progress during thenegotiation

  • 8/14/2019 Get Funded for Your Dream

    20/20