Jake Mendel, an entrepreneur-turned-banker working with Silicon Valley Bank’s Early Stage companies in NYC delivered a Fundraising Workshop at Techstars Startup Week Columbus on May 7th, 2018. This presentation covers: - How do I structure my fundraising process? - What should be in my pitch deck? - What resources are out there for founders seeking venture capital? - What round am I raising and why am I raising venture capital? - When’s the best time to raise? - How do I qualify investors? - What does a lead investor do? - What are the difference between VC’s in the Midwest vs. NYC/SF/Boston - How do I get an intro to a VC - How should I prep for VC meeting #1?

1. Founder’s Playbook
Raising Venture Capital
Columbus Startup Week 2018

2. Fundraising is HARD.
Repeat Founder 1st-time Founder
$$$ $$$

3. Helping founders scale faster
May 2018 – Columbus Startup Week 3
Early Stage Practice, NYC
Silicon Valley Bank
@ijakemendel
Consumer Tech,
CPG, Fintech, B2B
SaaS, Life Sciences
+ more
Our clients raised
>$118M in early
stage funding in Q1
Work with >1,000
Seed & Pre-Seed
founders in NYC
Bank >50% of all VC
funds & venture-
backed companies
FOUNDER’S PLAYBOOK: RAISING VENTURE CAPITAL

4. Entrepreneur-turned-banker
4
FOUNDER’S PLAYBOOK: RAISING VENTURE CAPITAL
Helping founders craft “problem-
statements” at a workshop with
IDEO in San Francisco.

5. Purpose and Goal
VC FUNDRAISING 101
▸ Fundraising forces you to articulate three things:
Why You +
Why Now +
Why this Problem
= How will you generate a venture-scale return
▸ Goal: Help you qualify investors, get high-quality intros,
pitch prep effectively & run a fundraising process.

6. Disclaimers
▸ This is not one size fits all; every deal is different.
▸ This assumes that you have decided that raising
institutional capital is right for you -- it’s not for every
company.
▸ All investors are unique, just as are all founders.
▸ Data in this deck is Ohio focused - fundraising and VC
Funds differ dramatically by region.
▸ Data in this deck is based on 2016-2018 trends.
Fundraising and valuation norms shift yearly.
VC FUNDRAISING 101

7. START BY ASKING YOURSELF:
▸ What round am I raising and why am I raising?
▸ When’s the best time?
▸ How do I qualify investors?
▸ What does a lead investor do?
▸ How do I get an intro to a VC?
▸ How should I prep for VC meeting #1?
▸ What should be in my deck?
▸ What other resources are out there?
VC FUNDRAISING 101

8. WHAT ROUND ARE YOU RAISING?
Pre-Seed
Seed
Series A
<$500K
$500K-$2M
$2M-$5M
▸ Pre-product
▸ Team is key metric
▸ Angels, F&F,
accelerators (non-
institutional VC)
▸ Unpriced round
▸ <10- 20% dilution
▸ Product launched
(at least a beta)
▸ Early traction is +
▸ Mix of Seed VCs,
Angel Groups,
▸ Either note or
priced round
▸ 10-25% dilution
▸ Product is scaling
▸ Traction signals
product/market fit
Institutional
Series A+
investors w/ a
lead
▸ Priced round
▸ 20%+ dilution
*based on VentureOhio 2017 Report
Round Size
Traction
TERMINOLOGY

9. PICK THE RIGHT TIME TO RAISE
Insider Tips
▸ Avg. raise
takes 3-6
months
▸ Avoid closing
during the
holidays
▸ Matters less at
early-stage
PROCESS PLAYBOOK

10. YOUR RAISE IS A SALES FUNNEL
Identify 30 qualified investors
Find best introductions and batch
your meetings
Refine your pitch after each
meeting until you close a lead
Use Lead as momentum to close
rest of round
PROCESS PLAYBOOK

11. 11
Qualify your list of investors
Does this fund
invest at your
Stage?
Stage
Does this fund
invest invest in
Your geography?
Location
Does this fund
invest in your
Industry/sector?
Sector
What size check
will they write?
Size
Is this fund still
actively making
investments?
Vintage
Has this fund
invested in any
competitive co’s
Activity
PROCESS PLAYBOOK

12. START WITH A LEAD INVESTOR
▸ Lead investors = tipping point
▸ Lead sets terms for round
▸ Board seat (maybe at seed,
usually at Series A)
▸ Check size matters (usually >1/3
round size)
▸ It’s okay to ask if a fund leads
PROCESS PLAYBOOK
Credit: Ryan Caldbeck @ryan_caldbeck

13. 13
Not all introductions are made equal
Spectrum of VC Intros
Strong Neutral Weak
Founders
they
previously
invested in
Trusted Partner
(Existing
Investor, SVB,
Attorney,
Accelerator)
Cold Outreach
(Direct or
Indirect)
Other VC that
passed – Don’t
ask for this!
PROCESS PLAYBOOK

14. HOW TO PREP FOR VC MEETING #1
▸ Have a pitch deck & one
pager prepped
▸ Have a thesis on why this
investor is a fit
▸ Don’t ask for an NDA at
the outset.
▸ Know that you’re not
going to get a check
today.
PREPARING TO PITCH
▸ Don’t use it! The best pitches
are conversations
▸ If you don’t, neither will the
investor you’re meeting
▸ Typically not applicable until
due diligence
▸ Every fund has a unique
decision process – ask!

15. At a minimum, your deck should include:
15
Problem Solution Team
Market Size Competition Traction
DECK BEST PRACTICES

16. Qualifier
Meeting
Follow-Up
Meeting
Decision
Meeting
Term Sheet Sign &
Close
Final
Negotiation
DON’T EXPECT A CHECK AFTER MEETING #1
FROM FIRST MEETING TO CLOSE

17. TRANSLATING A VC’S DECISION TO PASS
Can mean any of the following:
▸ Company is too early
▸ Doesn’t feel a fit with team
▸ Lack of capital to deploy
▸ Competitive Investments
▸ Concern on sub-sector
FEEDBACK, SIGNALS & WHEN TO SWITCH GEARS
TEST LEARN IMPROVE

18. Programs to accelerate your growth
*Data from Pitchbook – Accelerators/Incubators with most Ohio-HQ’d portfolio companies in 2016-2018 18
Accelerators & Incubators

19. YOU’VE RAISED MONEY?
CELEBRATE & GET BACK TO WORK!
Q&A