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The Road To Glory
How You Can Fuck
Everything Up
Should You Even Raise Capital?
QUESTION #1
Is Growth A Competitive Advantage?
Can You Only Achieve Growth With Funding?
Congratulations!
$2B0.5:1 1:1 1.5:1
$0
$20,000,000
$40,000,000
$60,000,000
$80,000,000
$100,000,000
$120,000,000
$140,000,000
2015 2016 2017 2018 2019
No.
No, they are not.
Strategic Plan
Talent Gap
Technology Gap
Customer Gap
Revenue Gap
Cash Situation
Equity Situation
Board Situation
Macro-Economic Situation
Micro-Economic Situation
Competitive Environment
Transience
Strategic Plan
Talent Gap
Technology Gap
Customer Gap
Revenue Gap
Cash Situation
Equity Situation
Board Situation
Macro-Economic Situation
Micro-Economic Situation
Competitive Environment
Transience
No Visibility.
No Control.
Constantly Moving.
Build a
Strong and
Healthy
Company
Angel Seed Series A Series B Series C IPO
Angel Seed Series A Series B Series C IPO
You Are
Here
Angel Seed Series A Series B Series C IPO
You Are
Here
Tech Companies Average More Than $80M of Funding Before Their
IPO
Angel Seed Series A Series B Series C IPO
You Are
Here
“Trust me.
There is a
good chance
this thing will
work”
100% you
“Check it out.
It has
worked””
95% you
5% proof
“It looks like
this thing is
working”
70% you
30% proof
“Don’t
believe me,
see for
yourself”
15% you
85% proof
“ ”
5% you
95% proof
Power
Success
Pre-IPO: ~4% Pre-IPO: ~5%
Pre-IPO: ~3% Pre-IPO:
~24%
Angel Seed Series A Series B Series C IPO
You Are
Here
$500K
$1.5M
$2M
25%
$2M
$6M
$8M
25%
$8M
$24M
$32M
25%
$40M
$160M
$200M
20%
$120M
$880M
$1B
12%
$300M
$1.7B
$2B
Raise
Pre
Post
Dilution
Angel Seed Series A Series B Series C IPO
You Are
Here
37.5%
37.5%
25%
28.13%
28.13%
18.75%
25%
21.09%
21.09%
13.88%
18.75%
25%
16.87%
16.87%
11.10%
15%
20%
20%
14.85%
14.85%
9.7%
13.2%
17.6%
17.6%
12%
You
Co-Founder
Investor 1
Investor 2
Investor 3
Investor 4
Investor 5
Public
11.88%
11.88%
7.76%
10.56%
14.08%
14.08%
9.6%
20%
Angel Seed Series A Series B Series C IPO
You Are
Here
37.5%
37.5%
25%
28.13%
28.13%
18.75%
25%
21.09%
21.09%
13.88%
18.75%
25%
16.87%
16.87%
11.10%
15%
20%
20%
14.85%
14.85%
9.7%
13.2%
17.6%
17.6%
12%
You
Co-Founder
Investor 1
Investor 2
Investor 3
Investor 4
Investor 5
Public
11.88%
11.88%
7.76%
10.56%
14.08%
14.08%
9.6%
20%
Angel Seed Series A Series B Series C IPO
You Are
Here
37.5%
37.5%
25%
28.13%
28.13%
18.75%
25%
21.09%
21.09%
13.88%
18.75%
25%
16.87%
16.87%
11.10%
15%
20%
20%
14.85%
14.85%
9.7%
13.2%
17.6%
17.6%
12%
You
Co-Founder
Investor 1
Investor 2
Investor 3
Investor 4
Investor 5
Public
11.88%
11.88%
7.76%
10.56%
14.08%
14.08%
9.6%
20%
Angel Seed Series A Series B Series C IPO
You Are
Here
37.5%
37.5%
25%
28.13%
28.13%
18.75%
25%
21.09%
21.09%
13.88%
18.75%
25%
16.87%
16.87%
11.10%
15%
20%
20%
14.85%
14.85%
9.7%
13.2%
17.6%
17.6%
12%
You
Co-Founder
Investor 1
Investor 2
Investor 3
Investor 4
Investor 5
Public
11.88%
11.88%
7.76%
10.56%
14.08%
14.08%
9.6%
20%
Angel Seed Series A Series B Series C IPO
You Are
Here
37.5%
37.5%
25%
28.13%
28.13%
18.75%
25%
21.09%
21.09%
13.88%
18.75%
25%
16.87%
16.87%
11.10%
15%
20%
20%
14.85%
14.85%
9.7%
13.2%
17.6%
17.6%
12%
You
Co-Founder
Investor 1
Investor 2
Investor 3
Investor 4
Investor 5
Public
11.88%
11.88%
7.76%
10.56%
14.08%
14.08%
9.6%
20%
You
Co-Founder
Investor 1
Investor 2
Investor 3
Investor 4
Investor 5
$237M
$237M
$155M
$211M
$282M
$282M
$192M
11.88%
11.88%
7.76%
10.56%
14.08%
14.08%
9.6%
-
-
310x
105x
35x
7x
1.6x
GAMEPLAN
What Type of Money Should I Raise?
QUESTION #2
Debt
Equity
DebtDebt
+
Equity
Angel Seed Series A Series B Series C IPO
You Are
Here
Convertible Debenture/SAFE Equity Equity
and/or
Debt
Who Should I Raise From?
QUESTION #3
Really Good People
Anyone else
Angel Seed Series A Series B Series C IPO
You Are
Here
You
Awesome People
Seed Investors
Financial Institutions
Tier 1 VCs
Private Equity
Investment Banks
What Are They Looking For?
QUESTION #5
Inertia is the resistance of any physical object to
any change in its state of motion including
changes to its speed and direction or the state of
rest.
Inertia
[in-ur-shuh]
Team
RevenueTraction
Team
RevenueTraction
How Do You Find Them?
QUESTION #6
DepositWithdrawal
What Is The Most Important Part of
Raising?
QUESTION #7
1. Terms
2. Amount Raised
3. Valuation
How Much Should I Raise/Value My Company?
QUESTION #8
The
Magic
Window
1/5 to 1/3
Step 1: Select a comfortable amount ($750,000)
Step 2: Select a floor amount ($500,000)
$500,000 @ 20% =$ 2,500,000 (pre)/$3,000,000 (post)
$750,000 @ $2,500,000 = $3,250,000 (post) or 23%
$1,200,000 @ $2,500,000 = $3,700,00 (post) or 32.5%
$1,200,000$500,000
1/5 to 1/3
Step 1: Select a comfortable amount ($750,000)
Step 2: Select a floor amount ($500,000)
$500,000 @ 20% =$ 1,500,000 (pre)/$2,000,000 (post)
$750,000 @ $1,500,000 = $2,250,000 (post) or 33%
$1,200,000$500,000
$750,000$500,000
1/5 to 1/3
Step 1: Select a comfortable amount ($750,000)
Step 2: Select a floor amount ($500,000)
$500,000 @ 20% =$ 7,500,000 (pre)/$8,000,000 (post)
Terms
ValuationAmount
Raised
Power
Success
Pro Tips
Raise only if you need it
Once you do, you have light
the fuse
Focus on the end goal and
reverse engineer the game
plan
Build for strength, not
acquisition
The goal is to maximize your
power while maximizing the
company’s success
Know what you are getting
into
Don’t chase cool
Bring on good people
and don’t take them for
granted
Ask other entrepreneurs
for help
Make sure you are
depositing to the karma
bank
It’s about terms, not
valuation
Build your magic window
Nobody knows the hell
they are doing, so do
what works for you