Dario Peirone - Chief Mentor & Speaker, EIA

1. Fundraising
&
Funding Options
Dario Peirone (MSc, PhD)
Founder and Partner Morning Boost LLP
European Innovation Academy
Turin, July 2019

2. Money, so they say…
if you ask for a raise
it's no surprise that
they're giving none
away…
A little entry test
• I need fundrasing to start
• I need funds otherwise I
won’t quit my job or
studies
• I don’t really need to
make fundrasing to start
my idea

3. Three Main Arguments
• What are investors looking for in a startup?
•Do you REALLY need fundraising?
• Which investor is right for your growth stage?

4. Startups are hard to evaluate for investors
Some intrinsic problems of appraisal:
•absence of historical data
•no revenues and/or presence of losses
•uncertainties related to the chances of survival
•multiple claims on equity
•assets’ illiquidity

5. What Investors love to see in a startup
•A convincing idea addressing a real costumers’ problem
•Complete Team
•Minimum Viable Product
•Proprietary Technology
•Paying costumers and/or a validated costumer
acquisition strategy
•Traction in a large total available market
•Track Record

6. Family &Friends…& Founders
• Least expensive in terms of cost and control and more
patient than other investors
• Personal investment by founders is an important signal in
front of the investors
• The investment of Founders, Family and Friends can be
organized informally or trough formal agreements
(suggested). A formal agreement should address the worst
scenarios.
• Possible disadvantages are the direct input into operations of
a venture and the tensions that could arise between the
participants

7. Bootstrapping
Operating a business as frugally as possible and cutting all
unnecessary expenses.
Useful because fundraising:
1. takes a long time
2. Decreases a firm’s drive for sales and profits
3. Increases the impulse to spend
4. Decreases the company’s flexibility
5. May cause disruption and problems in the venture
It should be stopped when the startup is about to loose some
opportunities

8. Business Angels
• Private investors with high income and wealth, successful
entrepreneurs or with remarkable managerial experience,
interested in the start-up process.
• They seek for smaller deals in seed and early stage ventures.
Usually they invest along with other two or more fellow BAs.
• Disadvantages are that they are geographically dispersed, most
of the time they do not have a recognized reputation, they have
little follow-on money
• They can be a real value added to the company because of
their knowledge, network and experience.

9. Crowdfunding
• 4 Types: Donation, Reward, Debt, Equity.
• It has surpassed VC and Angel Investing on the annual
funding amounts
• Storytelling and networking are crucial
• Secure early commitment by existing or BA investors
• Set the target funding a little lower than your desired goal
• Run your campaign like a «military operation» (Julia Elliott
Brown, ceo of Upper Street Shoes)
• Be aware of the reputational risk

10. Raising funds
The right moves
• Know well your competitive field (aka: Don’t suffice with theoretical
market researches or “I’ve spoken to potential customers who said
they would buy as soon as it’s available”)
• Know Who You Are Pitching To
• Have a Good Advisory Board and Legal Counsel
• Have a Great Business Plan & Executive Summary
• Be Specific About Your Funding Requirements
• The goal is to convince investors about your business model and of
the capability of your team to deliver it.

11. Raising funds
The bad moves
• Financial Projects with unrealistic assumptions and revenues
• Unrealistic Expenses
• Underestimating the Total Size of Investment to Achieve Scale
• Focusing Only on Proprietary Technology
• Always asking for NDAs
• Focusing Too Much on the Future at the Expense of the 12 Month
Milestone
• Avoiding a Discussion of Your Competition or Actually Claiming
Your Venture “Has No Competition”

12. This presentation owes much to the conversations with all the MB
team (Anat, Pietro, Silvana, Kartik, Piergiorgio and Zaira).
Thank you
for your
attention!
dario.peirone@morningboost.co.uk