3. 1. Plan
Angel
Bootstrap Ready? yes Prep Roadshow
no
yes (seed) VC
no
Stop!
4. Investor Readiness...
YOU KNOW:
How much?
Who from? (angel vs. VC)
Why? (what for? Milestones?)
YOU HAVE:
Docs: Exec Summary, Pitch Deck, Basic Financials
Deal team
Pipeline
5. Angel vs. VC...
Angel VC
Micro / Seed VCs ???
Opportunity Size < $20M $ 100M
2 rounds As much as
Capital needs
max it takes
Get to
Invest in
Finance Strategy Cashflow
growth
Positive
6. 2. Prepare
Document Checklist:
Executive Summary
Pitch Deck
Financial Model
Bonus:
Roadmap
Competitive landscape
Team Bios & hiring plan
7. Exec Summ
1 - 2 pages max
Sales document
One purpose -
get a meeting!
http://www.docstoc.com/docs/120015412/Executive-Summary
8. Pitch Deck
Ten Buckets Model
10 - 15 slides
Sell, don’t explain
How I evaluate pitches... Clear personalized problem statement
http://www.startupcfo.ca/2011/04/the-vc-presentation-grader/
Evidence of domain expertise
Known target customer with $
Can touch and feel the product
Clear ask
9. Financials
Baseline:
Expense Plan (hires, customer acquisition, overhead)
Months’ runway
Better:
2 year model with key assumptions (monthly yr 1, quarterly yr 2)
Examples:
http://andrewchenblog.com/2009/01/19/how-to-create-a-profitable-freemium-startup-spreadsheet-model-
included/
http://unstructuredventures.com/
10. Final Preparations
Deal Team
Lawyer
Advisors / Mentors
Pipeline
Qualified list of investors that “fit”
Path to get intros
11. 3. Pitch!
Tips
✓ Be prepared - all docs & deal team ready
✓ Roadshow - parallel, not serial
✓ Running start - build relationships *before* pitching
✓ Start early enough (3 - 6 months)
✓ Target the right investors
✓ At the right time
✓ Build trust
✓ All about traction...
12. Pitch Do’s and Don’ts
DO!
✓ Talk about yourself - we invest in people!
✓ Summarize - make it easy & memorable
✓ Be different / yourself!
✓ Tell a story
✓ Impress
✓ Commit - full time effort!
13. Pitch Do’s and Don’ts
DON’T!
✓ Disagree with yourselves
✓ Make me read
✓ Read your own slides
✓ Target everyone - 1% of a B users...
✓ Be alone - no competition = no market
✓ Avoid phone if possible
✓ No agents / intermediaries
14. Demo Day
Build & qualify your pipeline
Don’t re-pitch
Ask questions - qualify!!!
Filter out the posers
Build rapport
15. Day after demo day...
Follow up immediately - presumptive close
Build your pipeline - track everything
Broadcast: Mentors, advisors, friends, lawyers
Go for the “No”
Love at 1st sight
Get a lead
$ first, then deal structure
Be realistic on valuations
16. Angel List
http://angel.co/
Great for finishing a round, not starting
Go there when
- you have a lead
- 2/3 of round committed
- traction (aka Social Proof)
17. Evaluating Investors...
What do I want from this relationship?
Have they walked the talk? What is their track record?
Do they have deep pockets? Will they support me for future
funding?
Can they put together high quality investor syndicates?
Can they help in building my organization?
Can they improve my company’s profile and bring in high
standards of governance?
Is the valuation fair for both sides?
And, ABOVE ALL: Is there mutual respect and can the VC be my
sounding board?
18. Common roadblocks
Nobody wants to lead
Roll your own term sheet
Convertible note
Pitching a note to investors that prefer equity
Secure the $, then optimize the deal
Investors are dragging their feet
Plan a catalyzing event (launch, key hire, event, etc)
Build traction
Concerns over milestones
Raise more or spend less
