Beyond Bootstrapping: Raising Angel Capital
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Presentation about how to go about raising angel capital when you can no longer bootstrap your business. Run by Krista Morgan, Co-Founder of P2Binvestor & Bryn Weaver, Startup Lawyer. Linked to a webinar which can be found here: http://bit.ly/1pA9AU8
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Beyond Bootstrapping: Raising Angel Capital
- 1. BEYOND BOOTSTRAPPING WHAT TO DO WHEN YOU CAN NO LONGER GO IT ALONE. © 2013, P2Binvestor Inc. All Rights Reserved. Ensure you are connected to the webinar: 1. Click the “Audio” button above. 2. Select “Use Computer & Speakers” to access the audio. If you have trouble, let us know in the chat box to the left. 3. Click “Allow” if prompted to allow audio access to your computer. 4. We will have a Q&A session at the end. Feel free to enter your questions in the chat box as we go and we will include them in the Q&A.
- 2. BEYOND BOOTSTRAPPING WEBINAR MARCH 2014 PRESENTED BY Krista Morgan Co-Founder & COO P2Binvestor SPECIAL GUEST Bryn Weaver Weaver Law LLC
- 3. BEYOND BOOTSTRAPPING WEBINAR MARCH 2014 BOOTSTRAPPING PROS • Fundraising is time consuming • Focus on the product • No equity dilution • Lean startup mentality • Profitability is key • No investor management CONS • Slower growth • Free is harder to come by • Fewer staff, restricted hiring options • All-consuming focus on cash management • No investor support
- 4. BEYOND BOOTSTRAPPING WEBINAR MARCH 2014 BOOTSTRAPPING ISN’T ALWAYS POSSIBLE Lack skills to develop product Large up front costs required Idea requires expert or large team Prototype or Beta not easy to achieve First mover advantage is critical Credibility of fundraising needed to land contracts
- 5. BEYOND BOOTSTRAPPING WEBINAR MARCH 2014 TYPES OF CAPITAL Equity / Convertible Debt • Friends & Family • Incubators • Angels • Venture Firms Personal debt Private debt Commercial debt • Microloans • SBA Loans • Working Capital loans • Equipment financing Pre-selling product • Crowdfunding Grants
- 6. BEYOND BOOTSTRAPPING WEBINAR MARCH 2014 ANGEL EQUITY OR CONVERTIBLE DEBT Angels Provide ~90% of Outside Equity for Startups Review approx. 30 deals per month out of 75K applications per year http://www.sec.gov/info/smallbus/acsec/acsec-091713-verrill-hudson-slides.pdf
- 7. BEYOND BOOTSTRAPPING WEBINAR MARCH 2014 THINGS ANGELS LIKE TO SEE Clear business outline Prototype and/or Beta Testimonials from customers & experts Strong Advisory Board Realistic valuation & projections Minimal revenue Committed team Clear exit strategy Understanding of the challenges Competitive landscape analysis
- 8. BEYOND BOOTSTRAPPING WEBINAR MARCH 2014 BE PREPARED. BE PROFESSIONAL. Prepared 5-minute pitch (20 slides) One-minute demo video Have professional online profiles • AngelList • Gust • Crunchbase • FS6 • Website Business plan (5-10 pgs) • Executive summary • Four-year financial projections • FAQ • Team bios • Term sheet draft
- 9. BEYOND BOOTSTRAPPING WEBINAR MARCH 2014 DON’T FORGET A DILIGENCE FOLDER A secure online space where you collect ALL relevant documents and materials for your company. • Business plans • Financial forecasts and actuals • Articles of incorporation and bylaws • Legal contracts, patents and NDA’s • Sales and marketing materials • Operational documents • Resumes and employment letters It’s hard to find a lead investor because no one wants to lead diligence. Make it easy for them to say yes.
- 10. BEYOND BOOTSTRAPPING WEBINAR MARCH 2014 PITCH EVERYWHERE Find local angel groups and submit a request to pitch Apply to pitch at local meet-ups Seek out specialized angel groups if appropriate • Women-focused • E-commerce-focused • Youth-focused • Impact-focused Present and speak at industry conferences to get connections Angels like to buy into companies in industries that are familiar to them. Go where they are likely to be.
- 11. BEYOND BOOTSTRAPPING WEBINAR MARCH 2014 FOLLOW-UP & GET FEEDBACK Keep potential investors informed about your wins and the struggles you have overcome • Send out a monthly newsletter to interested parties • Share questions and feedback with all potential angels Angels like to invest with others they trust. Especially someone they see as expert in the industry. Listen to feedback. Seek it out. You can’t implement everything, but you need to be open to change especially if you hear the same thing all the time.
- 12. BEYOND BOOTSTRAPPING WEBINAR MARCH 2014 BE CLEAR ABOUT YOUR ASK Do you want a lead investor? How much money do you want as a minimum? Do you need an advisor? Board member? What is your valuation? What’s the minimum you need to move forward? Always have a starting point, it’s easier to negotiate when your counterpart knows what you’re thinking.
- 13. BEYOND BOOTSTRAPPING WEBINAR MARCH 2014 You need to drive the process
- 14. BEYOND BOOTSTRAPPING WEBINAR MARCH 2014 IT’S ABOUT STAYING POWER Volunteer at local Angel groups and/or Startup events Keep your business moving while fundraising Create momentum, share your progress Have coffee with everyone Pay it forward when you can
- 15. BEYOND BOOTSTRAPPING WEBINAR MARCH 2014 QUESTIONS & ANSWERS 1. Click “Raise Hand” button to verbally ask a question 2. OR type your question into the chat box on the left. Still have questions? Contact us at hello@p2bi.com after the webinar. Interested in our business funding model or referral program? Learn more at P2Bi.com or contact us at hello@p2bi.com.
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