CONFIDENTIAL INFORMATION PROPERTY OF DUO SECURITY, INC. Product, Market, Team Risk Seed + Series A ● Productize ● Build product ● Product/market fit ● Early traction Series B ● Operationalize ● Management team ● Grow distribution ● Reliable results Series C ● Strategize ● Product portfolio ● Revenue models ● Leadership
CONFIDENTIAL INFORMATION PROPERTY OF DUO SECURITY, INC. Leadership Molecule COO Operations CEO + CTO Vision & Strategy CFO Systems Infrastructure Governance Discipline Growth Execution Alignment Product Culture Brand
CONFIDENTIAL INFORMATION PROPERTY OF DUO SECURITY, INC. Org Design COO Operations CEO + CTO Vision & Strategy CFO Systems Finance & Acctg ISS Facilities Marketing Sales & BD Cust Success Product People Engineering Security Corp Dev Legal
CONFIDENTIAL INFORMATION PROPERTY OF DUO SECURITY, INC. Duo Board Lorrie Norrington Nominations & Governance Ron Gill Audit Hilarie Koplow-McAdams Compensation Matt Cohler, Karim Faris, Puneet Agarwal
CONFIDENTIAL INFORMATION PROPERTY OF DUO SECURITY, INC. Board and Committee Composition Audit Comp Nom & Gov Puneet Agarwal ⬤ Karim Faris ⬤ ⬤ Matt Cohler ⬤ Lorrie Norrington ** ★ Ron Gill ★ ⬤ Hilarie Koplow-McAdams ★ Recruit 1 ⬤ Recruit 2 ⬤ ** Lead ★ Chair ● Member
CONFIDENTIAL INFORMATION PROPERTY OF DUO SECURITY, INC. Board Meetings ● Not status meetings ○ Operationalize metrics, no weather reporting. Make the news, don’t just report it. ○ Convene board for strategic help and governance ● Send board report 2-3 days in advance ○ Plans, progress, problems - company overview, and then 3-5 paragraphs per dept ○ Google Doc with comments enabled ● Board meeting every 6 weeks until $10m ARR ○ Then quarterly meetings, and mid-quarter calls - but still a board report before each ● Agenda: ○ Prior quarter review ○ Next quarter plan ○ 2-3 Strategic topics ○ Board business
CONFIDENTIAL INFORMATION PROPERTY OF DUO SECURITY, INC. Venture Truths ● First rule of venture capital: there are no rules ● The most dilution you will ever take is from a cofounder ● Average venture-backed software company exit: $30m (from Early Exits by Basil Peters - exits.com) ● VCs invest in exits, not companies ● Build a great company, and the rest follows
CONFIDENTIAL INFORMATION PROPERTY OF DUO SECURITY, INC. Venture Math / Goals ● Align company expectations and investor return profile ○ 10x early - e.g. raise $1m on $3m pre-money, sell for $40m ○ 2-3x is angel-target return - but also growth / late stage ○ Fund size = strategy: exit potential should be >= size of the fund investing in you ● Expect ~15-25% target ownership in any equity round ○ % is based on fund strategy; this is avg representation to LPs ○ No intrinsic value - priced by competitive/market dynamic ○ But later, revenue multiple as a sanity check (e.g. in SaaS 10x) ● Raise enough for 18-24 months ● But grow into your post-money valuation in 12 months!
CONFIDENTIAL INFORMATION PROPERTY OF DUO SECURITY, INC. Fundraising Strategy ● Time-bounded ○ Create market dynamic for your deal. On average, first-time founders take 6-8 months! ● Targeted ○ Seek investors in related startups. Vintage, size, activity, market, thesis, operating experience ● Warm intros ○ Reference via portfolio CEOs, then get intro. Litmus test if you can sell, recruit, pitch? ● Structured ○ New lead each round ○ Preserve optionality - do not overraise, and set a bar the company can’t clear! ● See “Startup seed raising skillzzz” - Swooshing (travisk)
CONFIDENTIAL INFORMATION PROPERTY OF DUO SECURITY, INC. Choosing Investors ● More about the partner than the firm - but the firm matters ○ Partner with you for many years, find folks who know the struggle ○ Also know the partnership; the best firms offer more than money ○ Grocery store test: if you saw them, would you run up to them, or hide in the next aisle? ● Must understand your industry and/or business model ○ Look for relevant portfolio companies ○ Call those CEOs and ask for a confidential blind reference ○ Do not waste time teaching lay investors about your space ● Responsive, honest, direct, helpful ○ A clear no, and why, is better than a non-committal “come back when you…” ○ The best are fast to commit, a pleasure to work with, and super-responsive via text, etc. because they understand: tech is a people business!
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