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fundraising the hard way 2021/11/10

fundraising the hard way 2021/11/10

Liang Bin Hsueh

November 10, 2021
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  1. Planning a Successful
    Fundraising
    Liang-Bin Hsueh, InfuseAI
    The fundraising lesson I learn the hard way

    View Slide

  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

    View Slide

  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

    View Slide

  4. Think like investors
    My mind to your mind. Your
    thoughts to my thoughts.

    – Spock

    View Slide

  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.

    View Slide

  6. Co-founder Shares
    • Never 50:50


    • Co-Founder Equity Calculator:
    https://foundrs.com/
    You don't have co-founder? Find one.

    View Slide

  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

    View Slide

  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

    View Slide

  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

    View Slide

  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
    👨🔬

    View Slide

  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

    View Slide

  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

    View Slide

  13. Readings
    YC: Series A Guide
    This deck: https://docsend.com/view/dmi9aqn5vvx79742

    View Slide