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Startup Fundraising 101Startups on Onevest have raised $80 million+ with our help
September 25
Meet Today’s Host
Shahab KavianiCo-Founder | CMO, Onevest
• 10+ years as a startup founder
• Previously co-founded CoFoundersLab and HyperOffice (exited)
• Raised over $800k – including a portion via equity crowdfunding
Agenda
1. Fundraising Sources
2. Key Terminology
3. Pros/Cons of taking outside investment
4. How do you decide how much $ to raise?
5. What do investors look for?
6. The JOBS Act & Equity Crowdfunding
Fundraising Sources
Friends and
Family
Accelerators
VC (Venture Capital)
Bootstrapping
Crowdfunding
Angels Customers
Where do entrepreneurs get money?
Kauffman Sketchbook – “Money Game” by Paul Kedrosky, Senior Fellow Kauffman Foundation: https://www.youtube.com/watch?v=U470xXKfDyE
Largest sources of capital for young companies in order:
Founder Savings
Credit Cards
Family & Friends
Banks
VC, Angels, Etc.
Sources: Investopedia.com, http://www.investopedia.com/terms FT.com, http://lexicon.ft.com/
Term Sheet
Cap Table Valuation
Convertible Note Dilution
CrowdfundingEquity vs. Donation
Common vs. Preferred Stock
Key Terminology
Have you ever tried raising $ for a startup?
YES NOor
How Long Does it Take to Raise $?It depends, but it’s usually a long process.
Source: http://danielodio.com/daniels-rule-of-10-angel-intros-1mm-raise-infographic
Nothing beats cash flow; if you don’t need $, don’t take it
Should I Take Outside Investment?
PROS CONS
Hire faster
Launch faster
Experiment with more things (marketing, partnerships, etc.)
Investors support as advisor(s)
Give up equity/ownership
Dilute yourself and your shareholders
More people to answer to: direction of company no
longer only up to you
How do I decide how much $ to raise?
*Source: http://www.techrepublic.com/article/the-dark-side-of-venture-capital-five-things-startups-need-to-know/
How much $ do you
need to hit certain
benchmarks
Two good methods
If no benchmark, good rule
of thumb: take amount it
takes to sustain operations
for next 18 months + 25-50%
for added flexibility
TRACTION
LARGE MARKET OPPORTUNITY
IDEA
COMPETITION
What do investors look for?
TEAM
Team Overview
High-level overview of your
companyProblem
How your startup solves the problem
Market Size Competition Traction
Financial Projections
The ASKHow much are you raising?
How will you use the $
Pitch Deck – What to IncludeIN
TR
OS
TAT
SF
INA
NC
IAL
You raised money...Now what?
Communicate with and update your investors
Focus on milestones
Celebrate! (and then get back to work!)
Are you familiar with the JOBS act?
YES NOor
JOBS Act Title II
Tell everyone you’re fundraising
TIME
JOBS Act Title III
Fundraise from everyone (not just accredited investors)
JOBS Act = New Opportunities
NOW FORTHCOMING
Smaller investment minimums allow more investors to participate
More investors = More strategic advisors with knowledge of/experience in your space
Promote your company to a larger pool of investors outside your personal network, saving time and effort
Pros of Equity Crowdfunding
1
2
3