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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
    Liang-Bin Hsueh, InfuseAI
    The fundraising lesson I learn the hard way

    View Slide

  2. About Me
    • 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:
    You don't have co-founder? Find one.

    View Slide

  7. 🦄
    • Five years later: Five ways to
    build a $100 million SaaS

    • Roadmap to a SaaS IPO: how
    to unicorn your way to $100M
    $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
    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

    • Communicating option values
    with your team: A No B.S.
    Guide to Startup Stock Option

    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