You are on page 1of 30

Fundraising

2017.01.26 Founder Institute

Al Bsharah
Vice President, Data and Analytics @ Seismic
Previously CEO / Cofounder @ Email Copilot

Show of Hands

How many of you have


raised money before?
How many of you think
youre ready to raise
money right now?
What kind of money do
you want to raise?
FF, VC, Angel?

Its HARD to Raise Money

https://www.entrepreneur.com/article/230011

https://www.entrepreneur.com/article/230011

95%
6

Why do so many fail at raising money?


They blame it on San Diego.
They blame it on investors that
dont get it.
They blame it on the weather.
After multiple beat-downs, some
come to the realization they might
not be ready.
Were a stubborn bunch!
Wouldnt be doing this if we werent.
This passion blinds us sometimes (so
does tech news)
7

WHY to raise a round


WHEN to raise a round
HOW to raise a round
8

WHY to Raise a Round

Another show of hands


Do you want to raise?
If so, WHY?
The bar is high. You cant
just say to hire developers
or to build my product.
You need MOMENTUM
before you can even THINK
about raising money.
10

WHEN to Raise a Round

11

How many of you have MOMENTUM?


1. PASSIONATE customers
2. PAYING you

TRACTION

3. and NOT leaving


4. A FORMULA you can REPEAT for additional success
5. A BIG partnership (funneling more of #1, #2, and #3)
6. Have GRADUATED an incubator or accelerator
7. A ridiculously EPIC team
8. Proven that you can EXECUTE at a high level?
9. Received SIZEABLE publicity
12

The mind of an investor


Not even considering their
financials
They see HUNDREDS of deals,
and are picking a HANDFUL.
You have to check the previous
momentum boxes, otherwise
youre giving them more reasons
to say no.
You MUST STAND OUT. Do not
give them something they read
so they can fall asleep quicker at
night.
13

HOW to Raise a Round

14

You need to know


this:

Use this:

Pre-Money and Post-Money


Valuation
Convertible Debt
Cap
Preferred vs. Common Stock
Liquidation Preferences
Convertible Debt vs. Equity
Cap Table
Seed Round vs. Series A, B, C...
Participating vs. NonParticipating Preferred
Term Sheet
Pro-rata Rights
Accredited Investor

15

http://startupguide.com/

16

Friends, family, angels, VCs, strategic


ahhh?!
Skip friends and family unless you have
a stupid wealthy aunt or uncle that
doesnt care that theyll likely lose their
investment.
Bootstrap until youre REALLY ready.
Make income while you figure this out. It
will take longer than you think.
17

Friends, family, angels, VCs, strategic


ahhh?!

What kills all startups?


TIME! (not ENOUGH of it)
Extend that runway!
Angels early. VCs are great, but
value is questionable this early
unless youre a rocket ship.
18

HOW - Tools

19

Could do sessions on each of these


tools
Spreadsheets! Your best friend.
Light weight CRM. Streak w/Gmail is great.
LinkedIn, Conspire, Full Contact.
Founder Suite?
Angel List
Email. Use it well!
PowerPoint, Keynote

20

HOW - Networking

21

The single most important thing you


will do

Start talking to investors NOW.


Build a RELATIONSHIP.
Dont you dare ask for money!
(youll only get advice)
If you ask for advice, you might
someday
get some money.

22

The single most important thing you


will do

Always ask:
Who else do you think I should be meeting
with?
Ask if you can keep them up to date. Then
actually DO that. Show consistent progress.
Prove to them you can execute.
They are investing in YOU. Prove youre
worthy before money is a part of the

23

HOW - Pitching

24

Change your mindset about pitching


This book will change how you
think about raising money (and
pitching in general).
Its TOTALLY over-the-top in many
cases, but the point Oren is
making is what is important.
You are the prize. Money is a
commodity. Be bold. Take
charge.
Have confidence. Sell your story.
25

Guy Kawasaki

Pleaseplease
DO NOT USE AS A TEMPLATE!
Use this as a GUIDE for the
10 important items to cover.
Definitely use 30 pt font.

26

Guy Kawasaki

Tell your story. Pretend youre at a campfire trying to


captivate an audience with your pitch.
Bullets dont work. TELL A STORY.
Weave in the 10 slides that are important, and stick
them where they belong in the story.
STAND OUT from the crowd. Dont put people to
sleep.
You will suck at this. Its an art form.
My first deck changed 28 times in 2 months.
27

Random bits
The deck you use to pass around is very different
than the deck used on a stage.
Stop stuffing your deck with everything in your head.
Goal of a deck GET THE MEETING (nothing else).
Every slide should keep them on the edge of their
seat, so they want to learn more.
Then, you kill it in person. Remember, its about
YOU.
Hit them in the HEART, not the HEAD.
28

HOW The Process

29

Be organized

Get momentum
Line up your tools
Build your story
Identify prospects
Work your network
Get warm introductions
Get the meeting
Build excitement
Show progress and execution
Keep them on the hook
Have fun. Be yourself. Be genuine!
Close the round!

Repeat
50x
100x

30