12. HOW MUCH TO RAISE
⢠Basic financial model of
cost drivers and revenue
⢠Forecast monthly for 2
years
⢠Fundraise rule of thumb:
12-18 monthsâ cash
13. USE OF PROCEEDS
⢠Build out the product
⢠Grow the team
⢠Marketing
⢠Customer acquisition
⢠Working capital
23. GO FOR THE ASK
⢠Approach your top candidates at the same time
⢠Run conversations in parallel
⢠Decide whether / when to tell investors about each
other
24. CREATE URGENCY
⢠Anchor investor acts as the first domino
⢠âTriggering eventsâ to get a (or better) term sheet
26. STRUCTURE
⢠Preferences over common
⢠Board seat or 2
⢠Option pool
⢠Liquidation preference
⢠Control over sale, new options
⢠Debt that becomes preferred equity
when you raise it
⢠No valuation, but the âcapâ is a
ceiling
⢠Interest accrues, rate <10%
⢠Conversion discount
Equity
Preferred Stock
Debt
Convertible Notes, SAFEs
29. VALUATION & DILUTION
37%
See www.ownyourventure.com
Raise $1M on $5M pre
33%Raise $1M on $3M pre
34%Raise $1.5M on $5M pre
Dilution: whatâs your end stake?Valuation ($M)
Seed A B
$15
$6
$1
$30
$12
$5
30. FINAL DEAL POINTS
⢠Rolling close vs. set close
⢠Not done until money is in
the bank
Key terms
â Board composition
â Option pool
â Voting rights
â Founder vesting
â Change of control
â Redemption rights
â Information rights
â Anti-dilution
31. HOW LONG DOES IT TAKE?
⢠Longer than you expect
⢠3-6 months
⢠Speed limited by access to investors
⢠Your ability to find them
⢠Calendar availability (surprisingly hard)
43. TYPICAL PARTS
Overview Problem Solution Market
Traction
Marketing
Strategy
Team
Competition Conclusion
Financial
Projectionsâ¨
(high level)
Money Being
Raised andâ¨
Use of Funds
Revenue Model
& Business
Model