fundraising the hard way 2021/11/10

Transcript

1. Planning a Successful Fundraising Liang-Bin Hsueh, InfuseAI The fundraising lesson I learn the hard way
2. About Me https://bit.ly/iamhlb • co-founder and COO of InfuseAI, my 2nd startup. • We are developing PrimeHub MLOps platform to help data scientists to build, manage, and deploy AI models faster. • Convertible Notes (2018), Series A ($4.3M, 2021) • Series A: meet ~30 VCs in six months • Our great investors: Wistron (CVC), Top Taiwan, Hive Ventures, SVT Angels, 500 Startups
3. Lesson learned 1. Think like investors 2. Co-founder Shares 3. Understand your 🦄 business 4. Fundraising Plan 5. Dilution 6. Option Pool 7. DocSend 8. Readings
4. Think like investors My mind to your mind. Your thoughts to my thoughts. 
 – Spock
5. Think like investors alignment of interests • Founders: Change the world • VC: 10x returns; Exits; help founders to achieve the goal • IPO • M&A • (IPO then M&A) • Stock buybacks? • Your VC will be your partner for a long time. Find a good one, develop a win-win relationship, and ask them for help.
6. Co-founder Shares • Never 50:50 • Co-Founder Equity Calculator: https://foundrs.com/ You don't have co-founder? Find one.
7. 🦄 • Five years later: Five ways to build a $100 million SaaS business • Roadmap to a SaaS IPO: how to unicorn your way to $100M revenue $100M Business
8. Fundraising Plan • What will your next round look like? • What is your milestone in this round? • How much money do you need in this round? • 12 ~ 18 months runway • → Build a cap table to simulate very di ff erent cases: pre-money, post- money, how much % for each investor, option pool size, dilution
9. Fundraising Plan It didn't follow the original plan… • You are either undersubscribed or oversubscribed • If you are oversubscribed, don’t over-optimize like raise valuation, negotiate terms • If you want to take more money, discuss with your lead investor: Minimum Closing: $X. The remaining $Y should be closed within $Z days after initial closing. • Close it quickly
10. Dilution • How much is too much? • Data from How much dilution makes sense for a founder • To align the interests of founders and investors 👨🔬
11. Option Pool • Typical: 10~20% in Series A • Option grants done right: The Option Pool Shu ff le • Communicating option values with your team: A No B.S. Guide to Startup Stock Option Grants
12. Use DocSend • Know their interests before meeting with them • Know how to improve your pitch deck Use our referral code to get $15 credits: https://docsend.com/invite/3weutkn
13. Readings YC: Series A Guide This deck: https://docsend.com/view/dmi9aqn5vvx79742