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8/14/2019 TheFunded Web 2.0 Talk
http://slidepdf.com/reader/full/thefunded-web-20-talk 1/22
get funded for
your dream
a crash course raising smart moneya crash course raising smart money
By Adeo Ressi, Founding Member of TheFunded.com
8/14/2019 TheFunded Web 2.0 Talk
http://slidepdf.com/reader/full/thefunded-web-20-talk 2/22
Global Venture Capital StatisticsGlobal Venture Capital Statistics
• $60 Billion USD Annually Invested
• 3,000 Companies Funded Annually
• 3,800 VC Firms
• 17,500 Professional VentureCapitalists
8/14/2019 TheFunded Web 2.0 Talk
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8/14/2019 TheFunded Web 2.0 Talk
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Best Time in History to Start aBest Time in History to Start a
BusinessBusiness
• Disaggregation of traditional businesses
• Lower costs of labor
• Lower costs of real estate
• Increasing amounts of freeinfrastructure
• Steady supply of growth capital
8/14/2019 TheFunded Web 2.0 Talk
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do not
compromise
8/14/2019 TheFunded Web 2.0 Talk
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The Right Investor SelectionThe Right Investor Selection
Average
• Attend Meetings• Responsive
• Provide Research
• Assist with Fundraising
Good
• Lead Future Rounds• Identify Deals
• Build the Team
• Decision Support
• One bad investor will ruin your company.One bad investor will ruin your company.
8/14/2019 TheFunded Web 2.0 Talk
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8/14/2019 TheFunded Web 2.0 Talk
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0. Set-up your Company (right)0. Set-up your Company (right)
• Delaware C Corporation
• Interview fundraising lawyer
– What is the right corporate structure?– How many VC deals have they done?
– How many VC firm intros will they do?
– How will they protect your equity?
• Founder vesting for departures
• Governance protections
8/14/2019 TheFunded Web 2.0 Talk
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1. Demonstrate Traction (traction?)1. Demonstrate Traction (traction?)
• Prove out vision of company
• The definition of traction:
– Committed Team of Experts– Patented Approach or Technology
– Functioning Prototype
– Launched Offering
– Customer Adoption
– Revenue Demonstration
8/14/2019 TheFunded Web 2.0 Talk
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2. Secure Media Exposure2. Secure Media Exposure
• Company Blog
• Industry Blogs
• Trade Journals
• Research Organizations
• Television
8/14/2019 TheFunded Web 2.0 Talk
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ignore the
incoming calls
8/14/2019 TheFunded Web 2.0 Talk
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3. Prepare your Materials3. Prepare your Materials
• Prepare your materials
– Meeting PowerPoint (15 slides)
– Introductory “One Sheet”
– Capitalization Table
– Working Financial Model
–Competitive Landscape Analysis
– Published Industry Research
– (Audited Financials, Patents, Etc.)
8/14/2019 TheFunded Web 2.0 Talk
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4. Pick your Targets4. Pick your Targets
• Know all local investors
– Socialize at events
– Do background research
– Pick the right ones for you
• Identify connections
– Entrepreneurs
– Venture capitalists
– Bankers, lawayers, vendors
– Unsolicited
8/14/2019 TheFunded Web 2.0 Talk
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5. Make Initial Introductions5. Make Initial Introductions
• The “Magic” Five Sentences
– What do you do?
– What is your market size?
– What makes you unique vs competition?
– Where are you in your development?
– How much capital do you require?
• Less is more – no big emails!
8/14/2019 TheFunded Web 2.0 Talk
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6. Set-up the Meetings6. Set-up the Meetings
Good Signs
• Thoughtful Questions
• Market Understanding
• Set Follow-up Items
• “Interesting”
• Meeting Partners
Bad Signs
• No Questions
• Market Size Ignorance
• No Further Steps
• “Maybe” or “but”
• Handled by Associates
• Are they doing competitive research?
8/14/2019 TheFunded Web 2.0 Talk
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get to the next
encounter
8/14/2019 TheFunded Web 2.0 Talk
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7. Negotiate & Complete Diligence7. Negotiate & Complete Diligence
• Get the first term sheet
– Do not accept it
– Time is on your side
– Expiration is a tactic
• Find the second term sheet
• The details really do matter
8/14/2019 TheFunded Web 2.0 Talk
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Key Secondary TermsKey Secondary Terms
Good Bad
Liq Preference 1x >3x
Participation None Full
Inv Board Seats 1 >1
Founder Vesting None 75%
Option Pool 20% <10%
Dividend Optional Mandatory
8/14/2019 TheFunded Web 2.0 Talk
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What to Expect when Fundraising?What to Expect when Fundraising?
Low High
Management Effort 25% 50%
Time to Close 4 mn’s 12 mn’s
VCs Pitched 10 60
Offers Received 1 5
Equity Dilution 15% 45%
Amount Raised $0.5 MM > $10 MM
8/14/2019 TheFunded Web 2.0 Talk
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Tips from the InsideTips from the Inside
• Do not outsource your fundraising
• Know the legal terms
• There is no “Industry Standard”
• There is no confidentiality
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8/14/2019 TheFunded Web 2.0 Talk
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- What do you do?- What do you do?
- What is your market size?- What is your market size?
- What makes you unique?- What makes you unique?
- Where are you in development?- Where are you in development?
- How much capital do you- How much capital do you
require?require?
The “Magic” Five SentencesThe “Magic” Five Sentences
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