1. Approaching a VC Fund
Points for discussion
July 2007
Erez Ofer
Greylock partners

2. Agenda
• What is a Venture Capital Fund
• Stages and Sizes of Investments
• Approaching an Investor
• The process
• Financing structures
• Valuations
• The BOD and working with Investors

3. What is a Venture Capital Fund
• A Partnership
• Investing over a time frame
• With GP’s and LP’s
• Usually with a specific focus

4. Stages and Sizes of Investments
• Pre-Seed
• Seed
• A-Rounds
• In the middle …..
• Expansion rounds
• Venture Lending

5. Approaching an Investor
• The Team
• The Executive Summery
• The Investor Presentation
• The Business Plan
• Depending on stage:
– Customer References
– Partner References
– Advisors and people in the Eco-system

6. What does an investor look at?
• Team
– Quality of Team
– Do they know the space?
• Market
• How unique is the offering
• Product or Feature?
• Technology / Barrier / IP
• Market Eco-system
– Competition
– Large players
– Exit environment
• Expected Valuation

7. The Process
• The larger the investment the longer it will take
• Getting to know each other
– Investor presentation
– Biz Plan etc.
– Back and Forth
– Some initial checks
• DD Plan
– Market research
– Customer and Partner references
– Experts opinion
– Personal references (If established firm – HR aspects)
– Company plans, financials, contracts
– Agreeing on company direction. Are we thinking alike ?
– Who are other investors ?
– Exit scenarios
• Back and forth
• Term Sheet

8. Financing structures
• Equity
• Bridge Loans

9. Valuations
• Early stage –
– Very subjective, Perceived value
– What assets does the company have ?
• Team, IP, Barrier, have they done it before? Competition on
deal?
• Later stage
– Multiple on Revenue
– Pipeline, strategic deals in the works
– All of the above in Early stage
• Deal structure (Number of investors, current
holdings, etc.) could have an effect on valuation

10. The BOD - working with Investors
• Choose carefully, be comfortable with the
partners you choose. Not just the fund, but
also the people involved.
• It goes both ways.
• It’s like a ‘marriage’. There will be good
times and hard times. Make sure you think
about the hard times.

11. What to look for in a fund
• People – Experience, approach, chemistry
• Resources – Recruiting, Customer connections,
large company connections, etc.
• Fund Brand – A top tier brand will help with
recruiting, getting first customers, future
financing.
• Can it support the company throughout its life ?
• Will the BOD member be the first you go to - sun
or rain ?
• Will they be there in hard times?

12. Thank You
eofer@greylock.com