Why should an investor want to fund you ? What every entrepreneur needs to know about what makes investors tick !

1. How to get an Investor
to fund you !
Dr Aniruddha Malpani
www.malpaniventures.com
Images from the book, Startup Funding, by
Nicolaj Nielsen

8. Sources of funding
• Consultancy
• Job
• Bootstrapping
• Family and friends
• Customer-funding
• Crowd-funding
• Angels and VCs
• ICOs

9. Who can you raise money from ?

10. Bootstrapping
• Proves you can implement !
• Shows faith in yourself ! If you don’t
invest in yourself, why do you expect
investors to ?
• Guerilla marketing
• Your customers are your best source of
funding !
• If you can get paying customers, the
investors will follow !

13. Ideas, Implementation and
Funding
• Ideas are a dime a dozen. Don’t fall in
love with your ideas – most are bad !
• Generate lots of ideas ! This improves
your chances of stumbling on the right
one
• Don’t worry anyone will steal your
ideas. Share them and ask for criticism,
so you can polish them !
• Passion is necessary but not sufficient

15. Finding investors – simple, not
easy
• Cold email
• LinkedIn
• Warm introduction
• Establish yourself as a thought leader –
get them to come to you !
• The purpose of the first contact is to get
permission to get a second meeting

18. Have realistic expectations !
• Investors are busy
• Get flooded with pitches
• Default response is always – No !
• You need to be persistent and patient !
• Respect them – learn to empathise

22. Common mistakes
• Ask for a NDA
• Use DCF for valuation
• Try to bluff
• Refuse to accept criticism and
feedback
• “ Wannabe entrepreneurs”

23. Red flags
• Only an idea, with no
implementation
• Hockey stick curve for revenue
• “ No competition”
• No skin in the game
• Too many buzz words, such as AI
and ML

25. Due Diligence
• Pre-negotiation
• Due Diligence Checklist
• Negotiation
• Term Sheet

27. Funding
• Negotiation
• Valuation
• Control
• Our preferred option – CCPS, in
tranches, based on milestones

29. Legalese
• Term sheets
• SHA
• Focus on areas of agreement
• Use standard templates
• Find a startup friendly lawyer

32. Whom do I fund ?
• Fall in love with the team
• Non-financial reasons
• LOI vs ROI
• Integrity, Curiosity, Humility
• Willing to teach – and to learn
• Paying customers

33. Smart money vs dumb
money
• Not all investors are the same
• Do your homework before
accepting funding
• Treat the money with respect –
raising funds means taking on lots
of responsibility

35. Pearls of wisdom
• Beware of investors :
– asking how much return you can give them
– not respecting your time
• Don’t push-sale your company, get investors
to come to you
• Follow up till investors give you an answer. If
it’s a No , ask why they rejected you
• Learn to negotiate - Don’t be too rigid and
don’t be too flexible

36. Pearls of wisdom
• Funding is no validation for a business – only
repeat paying satisfied customers are
• Vanity metrics are a trap
• “No”s are not a personal rejection
• Don’t compare yourself with the unicorns –
they are outliers !
• Investors are optional – you can always
bootstrap

37. Angels vs VCs
• Angels invest personal money. Come in all
shapes and sizes, because they have different
motivations
• When did they sign their last cheque ?
Interview their founders
• VC structure – GPs and LPs
• Institutional imperative – decision making by
investment committee

40. Bitter truths
• Most startups fail
• No one knows which startups will fail
• It’s a numbers game
• What goes up usually went down first
• All companies always need more money

41. Risks
• Be prepared for failure
• Learn to be resilient
• Can be a great journey - will
teach you a lot about yourself –
and about the world !

42. Lonely journey
• Lots of emotional angst
• Hard to convince your family that
you want to chuck up a safe job !
• Need to find support
• Other founders are the best source

43. The role of mentors and
coaches
• Mentor vs Consultants vs Investors -
big difference !
• Incubators
• Accelerators
• Many parasites in the startup
ecosystem
• Advisory board

46. Key ingredient for success – Learn!
• To sell
• To tell stories
• To lead a team
• To get your hands dirty
• To be patient and persistent
• To work in a startup – the best way to
learn a lot very quickly !

47. Books for Entrepreneurs
• Financial Intelligence for Entrepreneurs by
Berman
• Hot Seat by Dan Shapiro
• Disciplined Entrepreneurship: 24 Steps to a
Successful Startup by Bill Aulet
• Bootstrapping your Business by Greg
Gianforte
• Start-Up Guide for the Technopreneur:
Financial Planning, Decision Making, and
Negotiating from Incubation to Exit by David
Shelters

50. Please buy this book !
www.startupfundingbook.com