Capital raising guide plus pitching bonus

1

The Adventure of

Capital RaisingMick Liubinskas

muru-D, Pollenizer, Startmate

2015

2

Let’s Pitch!

3

Did you remember any of

those?

Which made you want to follow

up?

Did you understand it?

4

My Mission Today

Every single person,

Action one of these ideas,

In the next 24 hours

5

This Workshop

Practical

Interrupt

Be a case study

Mick Liubinskas – Innes 48 - 2015

6

Who is

Mick?

7

Who is Mick?

3 kids, surfer, cook, author

Entreprenerd since 16

6 businesses, 2 wins

17 investments, 2 wins, 7 “alive”

muru-D, Pollenizer, Startmate

8

Who is in the room

Who wants to capital raise?

Why?

9

About Capital Raising

10

11

About Capital Raising

Avoid the hype

Business, not a startup

Hard to learn and to do

But it is learnable

12

Before You Start

Think about it

Get advice

Think about it some more

Take it seriously

13

You Are Finding An Investor

Not someone to give you

money

Partner

10x

14

Priorities

The right investor

The right amount of money for

your business

The right valuation

15

Seed

Family, Friends and Fools

Accelerators

Grants

$10-50k for 5-10%

16

Advisory Capital

Mentors and supporters

Can include vested options for

ongoing work or board seats

$20-$250k for 10%

17

Angels

Individuals

Their own money

Flexible – good and bad

$250k to $2m for 20%

18

VC’s

Pension funds money

10 Years lifespan

Analysts, partners: board seat

$2m to $100m for 20%

19

Capital Raise Path

Mick Liubinskas – Flearning - 2014

Start

Co-founders 1,000,000 100%

Total 1,000,000

Valuation $1

20

Capital Raise Path


Start Seed

Co-founders 1,000,000 100% 1,000,000 91%

Seed 100,000 9%

Total 1,000,000 1,100,000 1,350,000 1,750,000 2,350,000

Valuation $1 $400,000 $800,000 $2,000,000 $5,000,000

21

Capital Raise Path


Start Seed Advisory

Co-founders 1,000,000 100% 1,000,000 91% 1,000,000 74%

Seed 100,000 9% 100,000 7%

Advisory 200,000 15%

Team options 50,000 4%

Total 1,000,000 1,100,000 1,350,000 1,750,000 2,350,000

Valuation $1 $400,000 $800,000 $2,000,000 $5,000,000

22

Capital Raise Path


Start Seed Advisory Angel

Co-founders 1,000,000 100% 1,000,000 91% 1,000,000 74% 1,000,000 57%

Seed 100,000 9% 100,000 7% 100,000 6%

Advisory 200,000 15% 200,000 11%

Team options 50,000 4% 100,000 6%

Angel 350,000 20%

Total 1,000,000 1,100,000 1,350,000 1,750,000 2,350,000

Valuation $1 $400,000 $800,000 $2,000,000 $5,000,000

23

Capital Raise Path


Start Seed Advisory Angel Series A

Co-founders 1,000,000 100% 1,000,000 91% 1,000,000 74% 1,000,000 57% 1,000,000 43%

Seed 100,000 9% 100,000 7% 100,000 6% 100,000 4%

Advisory 200,000 15% 200,000 11% 200,000 9%

Team options 50,000 4% 100,000 6% 200,000 9%

Angel 350,000 20% 350,000 15%

Series A 500,000 21%

Total 1,000,000 1,100,000 1,350,000 1,750,000 2,350,000

Valuation $1 $400,000 $800,000 $2,000,000 $5,000,000

24

Terms Terms Terms

Veto rights

Board seats

Liquidation preferences

First rights of refusal

Drags and tags

Super majority, consensus voting

Participation rights

Minority shareholder protection

Communication rights

Tranched

25

Who sets the terms?

If you have multiple investors,

you can set the terms.

If you have one investor, they

set the terms.


26

Convertible Notes

A loan that can become equity

Discount rate

Interest rate

Capped


27

One day your investors

may fire you…


28

The best cash

investment comes

from…

Customers!


29

Exercise

My business will raise $______

From __________

Because __________

For _______ months runway


30

Repetition!!!!

Time for some stretching


31

Being Investor Ready


32

Focus

Are you ready to get investor

ready?

Big effort, big distraction.

Must be managed.


33

To Be Investor Ready

You know what you want

You have the story to earn it

Relationships are warmed up


34

Why Do Investors Invest?

Excitement

Support

Financial return 30%, 2x, 100x?


35

What do investors choose

to invest in?

A big opportunity

A plan to achieve it

A team to execute the plan


36

Risk Vs Reward


High Risk

Low Risk

Low Return High Return

Bank

interest

Seed

Corporate

Venture

Angel

37

Expansion, not Risk

Most angel and all venture

Already working

Capital to grow it

Focus not breadth


38

Investor Ready

Maybe we don’t need it…


39

Example Investment Story

Customers Cost Time

1st segment $60,000 9 months

2nd segment $25,000 5 months

3-10 $15,000 3 months


Raising $250k to launch 10 more segments

40

Example Investment Story

Customers Cost Time

1,000 customers $2.5 each 9 months




Raising $1m to acquire 500,000 more customers

41

Investment = Sales

Attention

Interest

Desire

Action


42

Which Investors

Target those that invest in the

amount you need in companies

like yours.

AND adds the value you need.

BUT allow for luck


43

Establishing a track record

Monthly meetings

Create a mailing list

[email protected]

Email out every 2-3 weeks


mailto:[email protected]

44

Example email

Here are 3 good things we’ve done. [We’re moving forward]

We did what we said we’d do last time. [Establish reliability]

Another good person is working with us [Show you are attracting people]

Here is what we’re doing now [Set up the next email]

Here is how you can help. [Show them you expect them to be active]


45

Who Else Is At The Table

Let the investor be a part of a

good network


46

Investor Pipeline

Talk to 10x the money you

need

Before closing have 3x

qualified interest


47

Build Momentum To The Close

Who can you close first?

Then close the next group

Then the next

Then a deadline


48

Call, then email

More good things have happened

We have the capital committed

Good people are investing

Attached is the documentation

The bank details are ….

This is the deadline


49

Psychology of Closing

Fear of missing out

This is my chance to get in

Deadline

The first dollar is hardest

Different for VC, but still there


50

Always Be Closing


51

Left Brain

Right Brain


52

Pitching


53

One Thing!

54

This is what I’ll pitch you

Pitching as planning

Your audience

Objective

Momentum

Practice

55

One Thing!

56

Pitching As Planning

Full story

Any holes?

Universal Pitch Deck

57

One Thing!

58

Objective

Cheque

Next meeting

Introduction

Hire / inspire

PR

59

One Thing!

60

Audience

Who are they?

What do they like?

How do they think?

How do they want the information?

61

One Thing!

62

What to say

• Problem – make it big

• Solution – make it clear

• Market – make it big

• Customer – make it clear

• Customer acquisition – show it works

• Business model – make it simple

Competition and why you are better – show you are aware

Our team – why is this the team to do this

Momentum – show the past, what’s next and where you go

The ask – what do you want

Summary – say the one thing again

63

What to say

• Nothing beats a demo, have a backup

• Get empathy, Use stories

• Link every slide to the one thing. 80%

• 40 point font

• Deck to present, deck to send

64

One Thing!

65

Momentum

We were here Now we are hereWe are going

here

0-10 10-100 100-1,000,000

66

One Thing!

67

Practice

One hour of practice for one minute of pitching

100 times

Stay strong

And always remember...

68

One Thing!

69

Follow Up Is Key

The next day

Show you listened

Track record of execution

Be specific on what you want

Mailing list

Re-targetting

70

71

One Thing!

72

This is what I just pitched you

Pitching as planning

Your objective

Your audience

Momentum

Follow up

Practice

73

Startup Science

One Thing!

74

1 Min Pitch PracticeTime permitting…


75

Capital Raising Review

Lead it, don’t let it lead you

Have a plan, build momentum

Close with confidence

Pitch one thing

Follow up, follow up, follow up


76

Help Mick Flearn

[email protected]

Mick LiubinskasEntrepreneur in Residence at

muru-DCo-Founder of Pollenizer

Investor at Startmate


mailto:[email protected]

77

What are you going to

do in next 24 hours?
