Angel Fundraising (Enhanced & Extended Version)

Transcript

1. Angel Fundraising (Enhanced & Extended Version)
2. There is no scientific evidence to support these ideas; use them at your own risk. DISCLAIMER
3. Agenda Big picture Gaps Capital sources Post fundraising Investors Fundraising Basics Shortcuts Term sheets
4. Remember the Big Picture
5. Remember the Big Picture Factory -> Network
6. Remember the Big Picture Analysis -> Synthesis
7. Remember the Big Picture shaped people
8. Remember the Big Picture Fundraising Team Technology Culture Customers Suppliers
9. Remember the Big Picture Fundraising Team Technology Culture Customers Suppliers
10. Remember the Big Picture 1999 2012 Cost of build 50x cheaper Time to market 3x faster Market size 10x+ bigger
11. Remember the Big Picture 1999 2012 VC Investment ~US$50bn ~US$53bn Angel Investment ~US$44bn ~US$40bn Total Investment ~US$94bn ~US$93bn
12. Remember the Big Picture 1999 2012 VC 10-12 year hangover Angel entire generation burned
13. Remember the Big Picture Fundraising Team Technology Culture Customers Suppliers
14. Identify and Fill Your Gaps
15. Identify and Fill Your Gaps Should you be an entrepreneur?
16. Identify and Fill Your Gaps Experience comes in many flavours
17. Identify and Fill Your Gaps Co-founders: Complementary skills Shared culture
18. Identify and Fill Your Gaps Team vs. Who’s the boss?
19. Identify and Fill Your Gaps Customers/users Who loves you?
20. Identify and Fill Your Gaps Product/service Maker time
21. Identify and Fill Your Gaps Design Beyond product
22. Identify and Fill Your Gaps Distribution Unsung hero
23. Identify and Fill Your Gaps Sales and/or marketing Talk the walk
24. Identify and Fill Your Gaps Mission Where you going?
25. Identify and Fill Your Gaps Culture Hire/fire values
26. Identify and Fill Your Gaps People What’s your process?
27. Identify and Fill Your Gaps Ecosystem/partnerships Who got your back?
28. Identify and Fill Your Gaps Regulation The matrix
29. Identify and Fill Your Gaps Service providers Making the sausage
30. Identify and Fill Your Gaps Global/cross-border Lost in translation
31. Identify and Fill Your Gaps Communication Writing, groups, 1x1
32. Identify and Fill Your Gaps How to fill these gaps?
33. Identify and Fill Your Gaps Founder market fit
34. Identify and Fill Your Gaps People Timing Money
35. Identify and Fill Your Gaps Each company is unique
36. Consider All Sources of Capital
37. Consider All Sources of Capital Casinos Not great odds Worked before
38. Consider All Sources of Capital Savings Scalable? Entrepreneur friendly
39. Consider All Sources of Capital Credit cards Not great odds Worked before
40. Consider All Sources of Capital Friends, family & fools Great with right family Most families not right
41. Consider All Sources of Capital Contests & prizes Great for super early Limited size, timing issues
42. Consider All Sources of Capital Government grants Great for super early Typically with strings
43. Consider All Sources of Capital Accelerators Great for new founders Geography, timing
44. Consider All Sources of Capital Customers Love & money Hard but worth the effort
45. Consider All Sources of Capital Vendors Great if you can get it Hard to start & sustain
46. Consider All Sources of Capital Angels Great for lean startups Not great for fat startups
47. Consider All Sources of Capital Seed funds Great for lean startups Not great for fat startups
48. Consider All Sources of Capital Family offices Very flexible Hard to access
49. Consider All Sources of Capital VCs Great for scaling Go big or go home risk
50. Consider All Sources of Capital Corporates Massive resources Hands on, culture gap
51. Consider All Sources of Capital Equity crowdfunding Complementary Complicated, still early
52. Consider All Sources of Capital Banks No equity dilution Highly unlikely
53. Consider All Sources of Capital Revenue / product share No equity dilution Hard to find and execute
54. Consider All Sources of Capital Exit via IPO Sounds glamorous Good luck with that
55. Consider All Sources of Capital Exit via M&A Practical outcome Post M&A life
56. Consider All Sources of Capital Partial exit via secondary Likely to grow over time Still early days
57. Consider All Sources of Capital Each investor is unique
58. Team Includes Investors
59. Team Includes Investors Money is the same
60. Team Includes Investors Investors ain’t the same
61. Team Includes Investors Know your gaps and needs
62. Team Includes Investors Start with milestones and work backwards
63. Team Includes Investors 2x the time 2x the cost
64. Team Includes Investors Investors can help with strategic issues
65. Team Includes Investors Investors can help with people issues
66. Team Includes Investors Investors can help with front end issues
67. Team Includes Investors Investors can help with back end issues
68. Team Includes Investors Investors can help with negotiations
69. Team Includes Investors Biggest value added at key inflection points
70. Team Includes Investors Not all deals are worth taking
71. Team Includes Investors The honeymoon is a preview of marriage
72. Fundraising is Hard
73. How long? Infinity and beyond Fundraising is Hard
74. Who? Every investor is unique Fundraising is Hard
75. How much? That depends Fundraising is Hard
76. What not to do (mostly)? Send cold messages Fundraising is Hard
77. What not to do (ever)? Stalk people Fundraising is Hard
78. Business plan Some investors like it Some investors don’t Fundraising is Hard
79. Pitch deck Some investors like it Some investors don’t Fundraising is Hard
80. Detailed financials Some investors like it Some investors don’t Fundraising is Hard
81. Elevator pitch Some investors like it Some investors don’t Fundraising is Hard
82. “Big” market Some investors like it Some investors don’t Fundraising is Hard
83. Lean approach Some investors like it Some investors don’t Fundraising is Hard
84. Technology Some investors like it Some investors don’t Fundraising is Hard
85. Humans Some investors like them Some investors don’t Fundraising is Hard
86. Easiest when you don’t need money Fundraising is Hard
87. Fundraising Shortcuts Exist
88. Meet random people and help them Fundraising Shortcuts Exist
89. Ask for and listen to feedback Fundraising Shortcuts Exist
90. Find entrepreneur mentors Fundraising Shortcuts Exist
91. Build a Board of Advisors Fundraising Shortcuts Exist
92. Search for founder market fit Fundraising Shortcuts Exist
93. Have a mission and a vision of the future Fundraising Shortcuts Exist
94. Build an investor funnel and use it Fundraising Shortcuts Exist
95. Geography still matters (the world ain’t flat) Fundraising Shortcuts Exist
96. Get market feedback on terms and valuation Fundraising Shortcuts Exist
97. Due diligence potential investors Fundraising Shortcuts Exist
98. Long term value beats short term value Fundraising Shortcuts Exist
99. Practice your pitch until it’s in your bones Fundraising Shortcuts Exist
100. It’s not a pitch, it’s a conversation Fundraising Shortcuts Exist
101. Logic is great, emotions are better Fundraising Shortcuts Exist
102. People, people, people Fundraising Shortcuts Exist
103. The Zen of Term Sheets
104. Lawyers give legal perspective, not business perspective The Zen of Term Sheets
105. Equity vs. convertible Both can be great Both can be terrible The Zen of Term Sheets
106. Lead investor Good lead is great Bad lead is terrible The Zen of Term Sheets
107. No lead investor Great if you understand it Terrible if you don’t The Zen of Term Sheets
108. Every term sheet is a bundle of terms not separate terms The Zen of Term Sheets
109. Valuation No consensus Enjoy the confusion The Zen of Term Sheets
110. Liquidation preference Alignment of interests Keep it simple The Zen of Term Sheets
111. Pro-rata / follow on rights Plan for the future Know your investors The Zen of Term Sheets
112. Board of directors Definitely doesn’t scale Run a modern version The Zen of Term Sheets
113. Information rights Transparency is good Except for competition The Zen of Term Sheets
114. Anti-dilution Stick with broad based Run from non-dilutable The Zen of Term Sheets
115. Drag along / tag along No small investor veto Many variations The Zen of Term Sheets
116. Founder vesting Life is messy Co-founders do split up The Zen of Term Sheets
117. Dividends Cost of time Analogy with team salary The Zen of Term Sheets
118. Option pool Talent is hard to get Also useful for partners The Zen of Term Sheets
119. Cap table Cleaner is better Time magnifies mistakes The Zen of Term Sheets
120. Make term sheets as simple as possible but not simpler The Zen of Term Sheets
121. Post Fundraising: Reality Hits
122. What are your gaps? Post Fundraising: Reality Hits
123. What do your investors bring to the table besides money? Post Fundraising: Reality Hits
124. Communication Frequency Style Post Fundraising: Reality Hits
125. If you like lean startups try lean boards Post Fundraising: Reality Hits
126. Sophisticated tools vs. Google docs Post Fundraising: Reality Hits
127. Metrics What’s really going on? What’s your core score? Post Fundraising: Reality Hits
128. The dip hits every company and it ain’t fun Post Fundraising: Reality Hits
129. Post fundraising ain’t the time to party and relax Post Fundraising: Reality Hits
130. Post fundraising is when the clock starts ticking Post Fundraising: Reality Hits
131. Fundraising is the warm up to building a business Post Fundraising: Reality Hits
132. “I am a slow walker, But I never walk back.” - Abraham Lincoln tytusm@frescoca.com