LAFI 2015 Fundraising Bechtel

8/20/2019 LAFI 2015 Fundraising Bechtel

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Fundraising - AnIntroduction to RaisingCapital



Images courtesy of ValueChainGeneration

Series A

Early Stage & Growth Stage

Product Market Fit Scaling

SeedFFF



BlueDeer

a Growth Agency

The Goal



1. FFF - Friends, Family and

Fools

2. Angels

3. Crowdfunding

4. Venture Capital

*

Focus onthe businessand the $$will follow

Types of Capital



! Friends, Family and Fools

a. From $1,000 - $100,000

b. Accessible

c.

Low or non-existentinvestment criteria

d. Limited in available capital

e.

Unsophisticated investors

*

Bootstrap aslong as you

can!

Raising Capital from FFF



! Angel Investors and Networks

a. From $5,000 to $500,000

b. Fairly Accessible

c.

Clear investment criteria andprocess

d. Standard funding amounts

e.

Both Sophisticated

*

“The Groupactually voteson whether wemake a phone

call”

Raising Capital from Angels



! Crowdfunding

a. Avg. Raise $7,000

b. Typically investors are notshareholders

c. Low barriers to entry

d. Success proves value to VCs

e.

Unsophisticated investors

*

“... worksmostly as a

viability play for

startups.”

Raising Capital: Crowdfunding



! Venture Capital

a. Significant availability of capital

b. Connections and relationships

c.

Sophisticated investorsd. Follow-on capital

e. Difficult to access

*

“Capital mightbe the least

important thing

they bring.”

Raising Capital: Venture Capital



! Accelerators

a. $20,000-$60,000

b. Significant availability of capital

c.

Connections and relationshipsd. Sophisticated investors

e. Follow-on capital possible

*

“Capital mightbe the least

important thing

they bring.”

Raising Capital: Accelerators



1. “When you’re talking to me in the first minute, I’m thinking"—"is this person

a leader?”

2. “Usually the first question I ask is, what inspired you to invent this

product?”

3. “I’m hoping that it’s based on a personal problem that founder had, and

this product is the solution to that personal problem.”

4. “If you’re going to be a leader, and hire a team- assuming your product is

successful, you’ve got to be a really good communicator.”

5. “When you first meet an investor, you’ve got to be able to say in one

”

*

Focus onthe businessand the $$will follow

What Investors Say



1. “The venture capital business is a 100% game of outliers- it’s extreme

exceptions.”

2.

“#on the order of 4000 ‘fundable’ companies a year, that want to raise

venture capital.”

3. “#about 200 of those will get funded by what’s considered a ’top tier VC’;

about 15 of those will someday get to a 100M in revenue#”

4. “#and those 15 from that year, will generate something on the order of 97%

of all the returns for the entire category of VC in that year.”

5. “One of the cautionary lessons of VC is, if you don’t invest on the basis of

serious flaws, you don’t invest in most of the big winners.”

*

“Be so goodthey can’t

ignore you.”

Start Thinking Like an Investor



1. “You’re almost always better off making your business better than your pitch

better.”

2.

“Raising venture capital is the easiest thing a startup founder is ever going to

do.”

3. “It’s often said, raising money is not actually a success, it’s not actually a

milestone for a company and I think that’s true”

4. “#running a startup is also the way I think about raising money"—"it’s a

process of peeling away layers of risk as you go.”

5. “#to get the best introductions to the A stage venture firms is to work throug

the seed investors or to go through something like YC.”

*

“...Investors# are just as

important aswho you aremarried to”

Investor Insights to Use



BlueDeer

a Growth Agency

!

Beta List Subscribers!

Downloads

! Activation (Use)

! Active Users (Retention)

! Referrals

!

Revenue

*Traction demonstrates

roduct/market fit

First Step: Traction*

Show Growth:



Where Are You Headed?

Step 1: Set Goals - Short (90 Days) and Med. (6 Mos.)

!

Users

!

Customers

!

Downloads

!

Subscriptions! Contracts

! Revenue



BlueDeer

a Growth Agency

!

What metrics demonstrate product/market fit?

!

Validate and/or be clear on revenuemodel

!

Demonstrate customer acquisitioncost and conversion rates

!

Ensure you have a strong team

Becoming Fundable

Step 2: Get Clear on Fundability Goals“Facts Exist Outside the B



BlueDeer

a Growth Agency

!

What are the “right” types ofinvestors for your startup andstage?

!

Work your network

!

Look for investors that haveinvested in similar companies

!

Prioritize your list based onmeaningful criteria

Who’s Going to Get YouThere?

Step 3: Make an Investor List“As a founder, your main g



BlueDeer

a Growth Agency

Sample Investor Tracking



Finding Investors

Step 3: Resources for Making Your List

!

Socaltech.com/vc - Ben Kuo

!

TheFunded.com

!

Angel List https://angel.co/los-angeles/investors

!

Crunchbase

!

http://visual.ly/vizbox/startup-universe/ !

Quora

!

http://laedc.org/innovate-in-los-angeles/vc-angel-

funds/



Connecting with Investors

Step 4: TripleN: Network, Network, Network

!

Broaden your network to include thoseconnected to potential investors

!

Look to cultivate introductions

!

Consider pitch competitions

!

Don’t overlook the gate keepers

!

Overall: continue to build a great business and a

great team!



BlueDeer

a Growth Agency

Relentlesslypursue

customerneeds

Stay Focused on the Market



BlueDeer

a Growth Agency

Chris BechtelGrowth Hacker and AdvisorBlue Deer LLC [email protected] Twitter: @chrisbechtel

insights.growthenginelabs.com

Strategize, Planand Execute!!

Addl. ResourcesSam Altman’s How to Start a Startup - Stanford - Lecture 9 - How to RaiseMoneyhttp://startupclass.samaltman.com/courses/lec09/

17 Quotes from Marc Andreesen and Ron Conwat:

https://medium.com/how-to-start-a-startup/17-quotes-from-marc-andreessen-ron-conway-on-how-to-raise-money-d0b710f115f1#.w82c11wb1

Stuart Eccles’ Lean Startup Metrics:http://www.slideshare.net/stueccles/lean-startup-metrics

Andreas Klinger’s Metrics for Early Stage Startups:http://www.slideshare.net/andreasklinger/metrics-for-early-stage-startups

Documents

LAFI 2015 Fundraising Bechtel