Some things to consider before taking on outside investment, where to find that investment and what you need to get it

1. Dos and Don’ts of Positioning
Your Company for Investment
TrepHub
June 20, 2013

2. DON’T: Waste time on investment if
you don’t need to . . .
The Best Investor is Often No Investor

3. DO:Know Where it Fits
Venture Capital
Family Offices
Corporate
VC
Angels
(Individuals
and Groups)
Crowdfunding

4. Corporat
e VC
Family Offices
Crowdfunding
DO: Know who to approach?
Small $
(<$1MM)
Seed Stage
Open to Smaller
Opportunities
(Even Lifestyle)
Angel Investors
Larger $
(>$2.5MM)
Growth Stage
Scalable
Opportunities
($100MM
revenues in 5 yrs)
VC Investors

5. Lines are Blurring
Small $
(<$1MM)
Seed Stage
Open to Smaller
Opportunities
(Even Lifestyle)
Angel Investors
Larger $
(>$2.5MM)
Growth Stage
Scalable
Opportunities
($100MM
revenues in 5 yrs)
VC Investors

6. Money is Fungible, but it is Not Equal
Some investors are strategic
Some provide mentoring
Some investors expect few strings . . . But may show up for Thanksgiving dinner
Some investors cannot be patient due to fixed fund lives
Banks expect personal guarantees
Grants often have government flow-down provisions
Regulatory costs can be deal killers

7. DO: Build relationships Before you
need $

9. DO: Have a credible team.
Most Investors Invest Foremost
in the Team
DO: Have a Robust Financial Model
(era of the spreadsheet jockey)
DON’T: have a 35 Page Business Plan
DO: Have what the Investor wants to see

10. DO: Understand market for terms
Tech startup – Seed Stage Equity Priced (not a convertible debt round)
AVC Blog: www.avc.com

11. Which Entity to Choose and Where?
• Tax Friendly?
– LLC (Self employment tax implications)
– LLP (Self employment tax implications)
– S Corp (limited on number/type of owners)
• VC Friendly
– C Corp (can always convert upon funding)
• Where
– Delaware is known commodity
– Florida is easy and cheap

12. Knowledge is Power
There is no good reason to make an out-of-market deal…
Know what is market and customary
(don’t count on your lawyer to know)
Fred Wilson’s Blog & Archives: www.avc.com
Mark Suster: www.bothsidesofthetable.com
Brad Feld: www.feld.com/wp/
Series Seed: www.seriesseed.com
Techstars: www.techstars.com/docs/

13. DO:Get Connected
Send me your company’s news for retweets
@StartupFL
Register for Startup Digest Melbourne
http://startupdigest.com/melbourne-fl/
Non-profit center for local tech entrepreneurship
including Co-working, events & community
http://www.trephub.com
Coders, Hacker & Founders
http://www.meetup.com/Coders-Hackers-Founders/

14. Thanks
Mark Mohler markrmohler@gmail.com
(don’t forget the middle initial)