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
   

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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
   

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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
   

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

   – Spock
   

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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.
   

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6. Co-founder Shares
   • Never 50:50
   
   
   • Co-Founder Equity Calculator:
   https://foundrs.com/
   You don't have co-founder? Find one.
   

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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
   

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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
   

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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
   

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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
    👨🔬
    

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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
    

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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
    

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

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