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