My Fund Raising Journey

1. MY FUND RAISING JOURNEY | @raomal
RAOMAL PERERA
raomal@LeanDisruptor.com | @raomal @LeanDisruptor | www.facebook.com/LeanDisruptor
EFFECTIVE FUND RAISING
Network365/Valista

2. 2

3. How Do You Finance A New Venture?
Sine Qua Non
Without which there is nothing!
3

4. 4

5. 5

6. www.Facebook.com/LeanDisruptor
6

7. www.facebook.com/LeanDisruptor
Advice to startups – Heidi Roizen DFJ
7
http://heidiroizen.tumblr.com/post/139377970205/dear-startups-heres-
how-to-stay-alive
• Stop clinging to your (or anyone else’s)
valuation
• Redefine what success looks like
• Get to cash-flow positive on the capital you
already have (AKA, survive)
• Understand whether your current investors
are going to get you there
• Stop worrying about morale
• Cut more than you think is needed
• Focus maniacally on your metrics
• Hunker down

8. 8

9. 9

10. Types of Market
• Clone Market
– Copy of an International business model
• Existing Market
– Faster/Better = High end
• Resegmented Market
– Niche = marketing/branding driven
– Cheaper = low end
• New Market
– Cheaper/good enough, creates a new class of
product/customer
– Innovative/never existed before
Clone Market Existing Market Resegmented
Market
New Market
10
www.steveblank.com

11. What is your Market Type?
Clone Market Existing Market Resegmented
Market
New Market
11

12. Existing Market Revenue Forecast
Existing Market
12
www.steveblank.com

13. Resegmented Market Revenue Forecast
13
www.steveblank.com

14. New Market Revenue Forecast
New Market Sales Curve
14
www.steveblank.com

15. The Players
15
Entrepreneur
Investor:
Angel /
Venture
Capitalist
Lawyer MentorAdvisor/
Corporate
Banker

16. Looking for Investment
• What is the most important thing
that an investor looks at?
• What is he investing in?
YOU!
16

17. Investors look for:
• Integrity
• Passion
• Experience
• Knowledge
• Skill
• Leadership
• Commitment
• Vision
• Realism
• Coach-ability
17

18. 18

19. MY FUND RAISING JOURNEY | @raomal 19
THE TOOLKIT

20. Master Your Weapons
20
• Yourself
• Business Model Canvas
• Your Pitches: Elevator Pitch, 2-page
Executive Summary, Slide Presentation
• Pitching Skills
• Financial Plan – do stress test your
assumptions
– Pricing
– Market
– Customers, Partners
• Negotiation Skills
20

21. 21

22. Problem
Solved?
U
Do
Better
Sell
Team C
M
Ask
Next
€
www.aristo.ie

23. Financial
Model
Business
Model
Business
Idea
Financial Model
Your plans for:
• Buying & Selling
• Overheads
• Funding
• Fixed Assets
Projected:
• Profit & Loss
Account
• Balance Sheet
• Ratios
But will it make
money?
23

24. Obvious But Essential
• Your Financial Plan must clearly explain how the
macro view of the business opportunity in your
business plan translates into a micro view of how
investors can generate a return by investing in
your enterprise.
• I cannot emphasize enough how much thought
needs to go into preparing the financial model to
show that you truly understand your business
model
• Know your model, own your model!
24

25. Negotiation
25
Tip:
Three things matter when negotiating a
financing;
1.Achieving a good and fair result
2.Not killing your personal relationship getting
there
3.Understanding the deal that you are striking

26. Negotiation
26
• Your biggest advantage is to have a solid Plan B –
lots of interest and competition for the deal.
• Never make an offer first – Why run the risk of
aiming too low
• Listen more than talk – especially at the
beginning of the negotiation
• Understand the market terms and whether they
apply to your situation.
• Have an open and collaborative approach with
your Investor.

27. Company
Early
product
Seed
the
Market
Market
Penetration
Trade Sale
/ IPO
Bootstrap to Nail the
Problem
Series C/D
Investment
Series B
Investment
Seed Funding
1: Problem /Solution Fit
2: Product/Market Fit
3: Scale
4: Exit
Stepping Stones
• Customer Development
• MVP
• Early Revenues
• Build Team
• Aggressive Market Rollout
• Large
Market
Opportunity
confirmed

28. 28
MY JOURNEY

29. 29

30. The Investment Dance
30
$
Teaser,
Elevator
pitch
2 pager, PPT,
working
sessions with
partner, team
Terms
discussed
Your team
pitches to their
full partnership
Final DD,
legal docs
drafted
Your
GREAT
innovation
3-9 months
Invited
to office
Term sheet
issued
Invited
for
coffee
They visit
onsite, key
suppliers,
…
Receive
them
onsite
Check
received
Now the
fun part
30

31. 3131

32. 32
THREE FOUNDERS:
CEO (LEADER)
CTO (TECHNICAL GURU)
SALES & BUSINESS DEVELOPMENT

33. copyright © 2002 Network365 Ltd. • company confidential
2000
2002+
network365 history to-date
Network365 innovation
SMS
messaging
Mobile
top-up
Mobile
payments
Global
presence
First
transactional
system
using WAP
Global
network
compliance
Mobile
Wallet
technology
3G
Europe’s first
3G trial
First
transactional
MMS application
SMS time
management
Mobile
Lottery /
Mobile
Billing &
Rating
First loyalty
Program in
Japan/ePurse
Global Payments
agreement
Optimization
of content
eyeWitness
technology
33

34. copyright © 2002 Network365 Ltd. • company confidential
industry recognition
GSM Award Winner 2002
Best Wireless Application Developer Ernst & Young
Emerging Entrepreneur award
nomination
One of “Europe’s
30 Hottest Tech Firms” 2001 &
2002
One of “Europe’s
Top Ten Start ups” Modezilla 50: The hot players
in wireless & I-mode
Ulster Bank/Irish Independent
Business Achievers 2002
finalist
'Tornado Insider 100’ featuring
Europe's top 100 emerging
private tech companies 2002
34

35. © 2005 Valista Ltd.www.valista.com
brand recognition
thought leadership
3rd Annual Mobiles Vietnam
2006, May 10th, Vietnam
Speaker: Gregg Marshall
ITU Telecoms World Event,
December, Hong Kong
Speaker: Raomal Perera (TBC)
Mobile Payments Asia 2006,
7-8 Sept, Bangkok, Thailand
Speaker: Raomal Perera
3rd Annual Mobiles Indonesia
July 5-6, Indonesia
Speaker: Gregg Marshall
CommunicAsia 2006,
June 20-23,
Singapore Exhibition
booth on Ireland stand
Off-Deck Mobile Content,
July 11-12, New York
Speaker: Craig McDonald
Exhibition booth
The 3rd Annual
Mobiles Indonesia
2006
Mobile Payments
Asia 2006
upcoming events: Valista is an invited speaker at many of the industry’s
leading events, recognized for its market expertise and leadership position
35

36. © 2005 Valista Ltd.www.valista.com
brand recognition
key global awards
Best Mobile Application Developer,
GSMA Awards 2002 & 2004
Top 100 Global
Companies, 2004 & 2005
One of IDC’s Top 10 companies
to Watch, 2005
One of Tornado Insider's
Top 100 Companies, 2004
Top 100 Global Companies 2006
Valista Honored in ‘The Stevies’ –
The International Business AwardsSM
36

37. © 2004 Valista Ltd. confidential information.
value proposition
about Valista
for buyers
secure, easy payments
wherever I am,
however I pay
for sellers
efficient access to
customers and
subscribers 24 X 7
Valista’s innovative e- and m-payment services are
fulfilling a strong demand for premium services by major
operators and ISPs in Europe, Asia and the Americas
150+ million users can
purchase using Valista
payments technology
1000+ digital and
real goods merchants
integrated
global service providers
monetize web and mobile
premium services
- higher ARPU
- service differentiation
- brand development
for service providers
37

38. © 2004 Valista Ltd. confidential information.
 top up
my phone
 subscribe to a
newspaper
 book a flight
download
a report
 book a hotel
pay a bill
 cancel a check
 top-up kid’s
phones
 vote online
 top-up my phone
 download a
new game
 buy an MP3
 download
a voucher
 change my ringtone
 play the lottery
 check my
phone credit
12
6
39
1
2
4
57
8
10
11
on the move at home
at play at work
premium services for subscribers
about Valista
38

39. First Steps (Pre-Seed)
• Incorporated Company
–EQUAL split of the shares; 1/3 each
between the three founders.
• Unsecured overdraft of IE£60k
• Invested £7,501 each (Total of £22,503)
• Enterprise Ireland Feasibility Grant of IEP
£15k
• Agreed that the founders will also
vest their shares over 48 months
39

40. Initial Cap Table
Founder 1 – 750,100 @ £0.01
Founder 2 – 750,100 @ £0.01
Founder 3 – 750,000 @ £0.01
Valuation = £22,503
(Transferred 50k shares to each of my
four children)
40

41. Value of Founder’s Share = IEP 22,503
Ownership = 100%
External Funding = IEP 22k
41

42. Next
Funding:
• Capitalised the Co. with IE£22k
• Bank Overdraft IE£60k
• EI (Gov) Feasibility Grant IE£15k
• First Customer – Carphone Warehouse
IE£15K
• Did not draw a salary – but accrued it.
42

43. Build Profile
RAISE PROFILE
PR
(KINMAN)
ACCOUNTANTS
(PWC)
BANK
(AIB)
ENTERPRISE
IRELAND
LAWYERS
(MOP)
43

44. Angel Funding (Startup Funding)
• Build Product – Mobile Commerce Server
• Ask Andy De Mari (serial entrepreneur) to
join the Board as Chairman & Mentor
• Source Angel Financing ~ IE£1 million
• Get started on the PR campaign
44

45. Angel Types
Newbie: Easily seduced by the product and the story:
Strategy: Focus on the vision. Make him an advisor. Reciprocate his
love.
Thought Leader: look for deals in key markets, leveraging certain
trends
Strategy: Teach him something new about the market--share an insight.
Captain Diligence!: Team leader, gives your plan a virtual
colonoscopy
Strategy: Have a detailed business plan. Prepare to defend key metrics.
Follower: follows the lead of key influencers in the group
Strategy: Find out who the influencers are, skip the followers
Network Angel: Leverages multiple angel groups-even his deals
have deals
Strategy: Leverage his network to build a syndicate for your company 45

46. Angel Types
Darth Vader: Cynical, thinks of a million reasons to say
NO, negative influencer
Strategy: Avoid, counteract by gaining support of thought
leaders
Ego capitalist: He’s cool, he’s hip, he’s made money as
a CEO and he’s figured out the formula--invest in what
made him $$ before.
Strategy: Wear a hoodie with his incubator’s name on it
Mercenary: Feigns interest but is really looking to sell
you his services
Strategy: Use pepper spray
46

47. Mentor Capital
What angel investing can be all about...
• Individual mentor and investor
• Helps with an angel or VC round
• Joins your team and rolls up sleeves
• Finds early €
• Helps you achieve milestones
• Introduces you to angels and VCs, when you are ready
How to find mentors:
• Network
• Ask your lawyer
• Go to angel pitch events
• Contact experts in your field who might be mentors
• Examine similar companies: who are their advisors?
47

48. Angel Funding Series A1
Series A1: 400,000 @ IE £1.00
Total No. of Shares = 2,650,300
Valuation IE £2.65 million
48

49. Angel Funding Series A2
Series A2: 724,700 @ IE £1.75
Total No. of Shares = 3,375,000
Valuation just under IE £6 million
TIP:
Mentors are great. There’s no reason not to give
someone a small success fee if they help you raise
money
49

50. CAP Table at Angel Round
Raomal Perera 19.2% IR£7,501 IR£0.01 750,100
Denis Hennessy 19.2% IR£7,501 IR£0.01 750,100
Patrick O'Callaghan 19.2% IR£7,501 IR£0.01 750,100
Founders 57.7% IR£22,503 IR£0.01 2,250,300
Private Investors - Series A1 10.3% IR£400,000 IR£1.00 400,000
Private Investors - Series A2 18.6% IR£1,268,225 IR£1.75 724,700
Staff 10.9% IR£0.10 425,000
Directors 2.6% IR£0.10 100,000
50

51. Value of Founder’s Share = IEP 3.9m+
Ownership = 57.7%
External Funding = IEP 1.69m+
TIP:
Don’t be held hostage by any Investor.
Make Sure Friends and Family understand the ‘Risk’ in
the investment.
51

52. “Today Knowledge
has Power. It
controls access to
Opportunity and
Advancement.”
― Peter Drucker
52

53. 53
VENTURE CAPITAL FUNDING

54. History
• General Georges Doroit is considered to be the
father of venture capital industry – founder of
INSEAD
• In 1946 he founded American Research and
Development (ARD) Corporation, whose biggest
success was Digital Equipment Corporation.
– When Digital Equipment went public in 1968 it
provided ARD with 101% IRR.
– ARD's US$70,000 investment in Digital
Corporation in 1959 had a market value of
US$37mn in 1968. 528x!!
• The first Bay Area venture-backed startup is
generally considered to be Fairchild Semiconductor,
funded in 1959 by Venrock Associates (Rockefeller)54

55. What you need to know about Venture Capital
•Venture capitalists:
– Raise pools of capital from institutional and
individual investors
– Finance new and rapidly growing companies;
– Purchase preferred equity securities and take
board positions;
– Add value to the company through active
participation;
– Take higher risks with the expectation of higher
rewards;
– Have a long-term orientation
– Make $$$ by via M&A or IPO liquidity events
55

56. N365: Close 1st Major Customer Deal
Closed first customer deal with Digifone (now
O2). Licence fee: > IE£80k + maintenance
56

57. N365: Built a Pipeline
Second Telco customer (HK-CSL)
at over 50% probability
57

58. Convertible Loan from VC
Received €1.0m as a Convertible Loan from
a VC.
Loan to convert into shares at a discount of
10%
58

59. VC Psychology: The Fear / Greed Pendulum
Greed:
• Wanting to maximize fund returns
• Wanting to build the next big thing
Fear:
• Down round if company runs out of cash before
achieving milestones
• Loss of capital (and prestige)
• Loss of Limited Partner support for next fund
59

60. VC Funding
TIPS:
• Understand the economic and control terms
• Get to know the General Partners in the VC – They
matter and make the decisions
• The term sheet is critical. What’s in it usually
determines the final deal structure. Don’t think of it
as a letter of intent. Think of it as a blue print for
future relationship with your investor.
• Liquidation preference is a critical term that is part
of most equity financing
• Move to close the deal quickly – From Term Sheet
to money in the bank - we did it in 10 days!
60

61. A Good VC Pitch – What is the opportunity?
• Tells VCs what they need to know
• Is different from your customer sales
pitch
• Is about your business, not about your
product
• Is clear about what you do
• Excites VCs about the opportunity to
build a market leader
61

62. A Good VC Pitch – Deal with the Risks
• Deal honestly with your key risks:
• Product Risk: Does the product work & meet
customer needs?
• Market Risk: Is there a large € market for this?
• Competitive Risk: Is this the best company in this
space?
• Management Risk: Is this the right management
team to execute and build this business?
• Liquidity Risk: Can VCs exit (within the timeframe
of the fund) and return € to investors?
62

63. What You Say – What the VC Hears
• We are three years ahead of the market
– OK, call me in two years when customers need
you, if you haven’t run out of money waiting for
the market to emerge.
• The big guys don’t have a clue
– Great. They won’t partner with you, either.
• Our model is conservative and only assumes
we get 1% of the market.
– Why 1%? Your model is faith-based, not fact-
based.
• We are the next Instagram.
– Please don’t skip your meds. 63

64. What You Say – What The Vc Hears
• We are Groupon for restaurants, events….
– You and 10,000 others… most of whom will fail
• We are destined to win because our product is
so compelling.
– And you’ll be outclassed by folks with better
marketing
• Exit strategy? As the next big thing, we’ll IPO
for sure.
– But 95% of exits are M&A.
• We have no competition.
– You have no market… OR...
– Really? We met two competitors last month 64

65. VC Funding Series B
• €15m
• Pre money valuation €30m
– Dropped from €38m due to dot com crash
• Price per share €6.1418
– Dropped from €7.54491
• Employee Option Pool (20%)
• 2 Investor Directors
• Legal fees capped at £25k
• Weighted average anti-dilution
• Liquidation Preference etc…
65

66. Value of Founder’s Share = IEP 13.8m+
Ownership = 30.6%
External Funding = IEP 16.69m+
TIP
Understand the economic and control terms
66

67. VC Funding Series C
• €10m
• Pre money valuation €21m
• C convertible preferred shares @ €2.801 per share
• Employee Option Pool (20%)
• 3 Investor Directors
• Keyman insurance for Raomal Perera & Denis
Hennessy
• Legal fees capped at £50k
67

68. Moving to the US
• Consider buying a US product firm to establish a
beach-head
• Choose US geography based on proximity to
customers and relevant capital
• Keep engineering in a lower-cost region outside of
US
• You don’t need to hire an American to run your
operation but your US head should have US
experience, especially sales & business
development
• Leverage existing multinational customers
/partners 68

69. Acquisition Series C-1
• €11m
• Acquired iPIN
• Entry into the US market
• Create clear market leader
• Build strength against new competitors
• Accelerate growth and profitability
69

70. Stage Pre-Money/ Post-Money Valuation Distribution of Equity Ownership
Seed Pre-money Investment Post-
money
Team Angel VC1 VC2 VC3 VC4 VC5
€0 €22,5k €22.5k 100%
Series A Pre-money Investment Post-
money
Team Angel VC1 VC2 VC3 VC4 VC5
€2.9m €0.5m €3.4m 89.7% 10.3%
€4.3m €1.6m €5.9m 71.1% 17.9% 9%
Series B Pre-money Investment Post-
money
Team Angel VC1 VC2 VC3 VC4 VC5
€30 €15m €45 49.7% 12.1% 15% 16.2% 4% 3%
Series C Pre-money Investment Post-
money
Team Angel VC1 VC2 VC3 VC4 VC5
€22.5m €10m €32.5m 29.9% 5.4% 20.3% 19.5% 2.9% 2.9% 19.1%
Network365 – Multiple Funding Rounds
70

71. The Key to Getting Funded
• Has a credible CEO /founders with relevant market
experience for this business
• Has traction & proof points (customers)
• Is strongly differentiated from the competitors
• Has a well conceived business model
– Financials are supported by business assumptions
– Company is metrics and milestone driven
– CEO/team knows what it takes to get sustainable growth
– Is capital efficient
– The economics seem to make sense
– The team lives their model
• Is solving a problem that matters and captures the
investors imagination
71

72. 72
FUNDING OPTIONS

73. Who’s Your Investor? The Good, The Bad
Investor The Good The Bad
You • You’re the boss
• Total control
• Total ownership
• Minimal funding
• No feedback
Angel(s) • Mentoring
• Feedback
• Moderate funding
• No obligation to repay
• Limited runway
• Limited network
• Some dilution
VCs • Unlimited funding
• Long runway
• Large network
• Good governance
• Your credibility
• Conflicting agendas
• Loss of control
• Massive dilution
Bank • No equity dilution • No mentoring/feedback
• No network
• Bias on cash flow
• Obligation to repay
73

74. Investor Types by Stage
Financing Round Definition Typical Amounts Typical Investors
Pre-seed Proof of concept - - Visa, mortgage
- Friends & Family
- Small grants
Seed Prototype (alpha) €25k - €500k - Friends & Family
- Govt. Agencies
- Angels
Start-up Commercial device
(beta)
€500k - €3m - Super Angels
- Early-stage VCs
Expansion
- 1-3 rounds
typical
Strengthen team
Scale
manufacturing
Expand sales
€2m - €10m - VCs
- CVCs
Mezzanine/Bridge CFBE
Position for IPO
€5m - €30m - VCs
- Cross-over funds
Buy-out Secondary sale - - PE firms
www.thousandseeds.com 74

75. Funding – SME Tool (Ireland)
This is a great tool for Irish Entrepreneurs.
Originally produced by the Dept of Finance and
now promoted and supported by the LEOs.;
https://www.localenterprise.ie/Discover-
Business-Supports/Supporting-SMEs-Online-
Tool/
75

76. Funding: Bootstrapping
Good Books:
 Seth Godin – Bootstrappers Bible
 37 Signals - Getting Real & Rework
7 bootstrapper tools
1. Nothing to Loose
2. Happy with small fish
3. Presidential Input
4. Rapid R&D
5. The Underdog
6. Low Overhead
7. Time
76

77. How To Run A Company On A Shoe String
(i.e. Bootstrap)
What are the best productivity tools for
entrepreneurs: http://www.quora.com/What-are-the-
best-productivity-tools-for-entrepreneurs?srid=9JG
eg: Dropbox, Evernote, Gmail,Google Docs, LinkedIn,
Mailchimp, Mindmaps, Skype, Wunderlist, Xobni,
Expensify, AsanaFlow, Basecamp etc…
77

78. Funding: Award Programmes
• Award programmes
• Inter-trade Ireland’s Seedcorn competition
• Cartier Women’s Initiative
• Social Entrepreneurs Ireland
• Lots more …….
Exercise: Search for Award programmes
both local & global that you could avail off.
78

79. Enterprise Ireland Funding
www.enterprise-ireland.com
www.Startinireland.com
79

80. Get Investor Ready - Enterprise Ireland Pre Investment
Supports for High Potential Start-Ups (HPSUs)
• HPSU Feasibility Grant - €15k (50%)
Used to investigate the viability and potential of an
innovative/high potential start-up and the development
of an Investor Ready Business Plan. Eligible costs include;
Salaries and Overheads, Consultancy Fees, Foreign Travel
and Subsistence, EI approved Business Accelerator Fees,
Trade Fair costs and Prototype costs.
• Mentor Grant - €1,750
Used to support the cost of a Mentor Assignment.
Enterprise Ireland can match you with an experienced
business mentor to assist you in your start-up phase or
advise on specific areas of your plan.
80

81. Get Investor Ready - Enterprise Ireland Pre Investment
Supports for High Potential Start-Ups (HPSUs)
• Innovation Voucher -€ 5k
Innovation Vouchers, worth €5k, are available to assist a
company to work with a registered college or knowledge
provider to explore a business opportunity or technical
problem.
• New Frontiers Entrepreneur Development Programme -
€15k (6 months full-time)
National incubation programme that offers successful
applicants with a package of supports to help accelerate
their business development and to equip you with the
skills to successfully start and grow a company.
Applications must be made directly to your nearest
participating Institute of Technology. 81

82. Get Investor Ready - Enterprise Ireland Pre Investment
Supports for High Potential Start-Ups (HPSUs)
• Competitive Feasibility Fund - North East Region - €25k
Fund to assist a new start-up company or individual
entrepreneur to investigate the viability of a new significant
growth orientated business or proposition to be located in
the North East Region (counties Louth, Cavan and Meath).
• Competitive Feasibility Fund for Female Entrepreneurs -
€25k
Fund to assist Female Entrepreneurs to investigate the
viability of a new growth orientated business that can
succeed in global markets. The focus is on developing new
businesses that can move beyond the domestic market and
demonstrate real potential for internationalisation.
82

83. Investor Ready - Enterprise Ireland Equity Investment Supports
for High Potential Start-Ups (HPSUs)
• Competitive Start Fund for Female Entrepreneurs - €50k
€50k equity investment to support eligible, female-led, early
stage start-up companies. Learn more about the type of
companies supported and the next closing date for
applications.
• Competitive Start Fund (CSF) €50k
€50k equity investment to support eligible early stage start-up
companies. Learn more about the type of companies
supported and the next closing date for applications.
• Innovative HPSU Fund (Equity) €150k-€350k
The Innovative HPSU Fund allows Enterprise Ireland to offer
equity investment to HPSU clients, on a co-funded basis to
support the implementation of company business plans. First
time and follow-on equity investments in HPSUs are supported
under this offer.
83

84. Crowdfunding
Entrepreneurs using :
Today’s technology (internet and website) to
 Reach many and
 Find capital to their idea, project or company
84

85. Funding – Crowd Funding
• There are different types of crowd funding
• You pay a fee to the crowd funding platform
– Between 2% to 10%+
• Choose the site that most suits your cash
needs as well as considering other factors
• Pick a site that has the right level of
functionality for you
– Do you want a ‘all or nothing’ site?
• Understand the size of the crowd
– Registered vs. active
• Keep researching this space. Lots of new
sites coming on-stream
85

86. Funding – Crowd Funding
Donation Funding
• UK; www.justgiving.com, www.virginmoneygiving.com
• US; www.gofundme.com, www.sponsume.com,
www.causes.com www.crowdrise.com, www.fundageek.com
Pledge Funding
• UK; www.crowdfunder.co.uk, www.wefund.com
• US; www.kickstarter.com, www.indiegogo.com,
www.gofundme.com, www.rockethub.com,
www.peerbackers.com, www.sellaband.com,
www.quirky.com, www.crowtilt.com
• Ireland; www.ifund.ie, www.fundit.ie
86

87. Funding – Crowd Funding
Straight debt funding
• UK; www.fundingcircle.com, www.zopa.com, www.thincats.com,
www.ratesetter.com
• US; www.somolend.com, www.lendingclub.com, www.prosper.com
• Ireland; www.linkedfinance.com
Specialist Debt Funding
• UK; www.crowdahouse.com, www.marketinvoice.com,
www.platformblack.com
• US; www.receivablesexchange.com
Equity Funding
• UK; www.crowdfunder.co.uk, www.wefund.com , www.CrowdCube.com
• US; www.growvc.com, www.angellist.co, www.seedups.com,
www.secondmarket.com,www.earlyshares.com, www.fundable.com,
www.startupvalley.com
87

88. Funding – Crowd Funding
Social Enterprise Funding
• UK; www.rebuildingsociety.com, www.buzzbnk.org,
www.crowdmission.com
• US; www.kiva.org, www.razoo.com,
www.startsomegood.com, www.waholy.com,
www.40billion.com
Multiple Funding Platforms
• UK; www.banktothefuture.com
– A site where investors can invest for shares (equity)
and/or for debt and also do charity fundraising all on the
same platform.
88

89. Funding – Government Incentives
• Revenue’s seed capital scheme
• Enterprise Ireland
• Social Welfare
• Tax relief for new startups
• Employment & Investment Incentives
• R&D Tax Credit
• Revenue Job Assist
• Startup Incubators (eg. Ireland, Chile ….)
89

90. Funding - Options
• Accelerators (€15k-€50k)
– NDRC Launch Pad, Propeller, Ignite (Cork),
Propel (NI), New Frontiers (EI)
• Private Investors
– Angel Investors & BES Investors
• typically investing between €25k - €100k
• Seed Funds:
– AIB Seed Capital Fund & Startup Accelerator
Fund
– BOI Early Stage Equity Fund, Startup & Emerging
Sectors Equity Fund.
90

91. Funding - Options
• Regional Venture Capital Firms (RVCFs)
• Corporate Venturing
• Venture Capital Firms
• Venture Capital Trusts (VCTs)
• Stock markets
– There are a few ‘junior’ stock markets such as the
Alternative Investment Market (AIM), Plus Market
Group (OFEX)
91

92. Funding - Options
DEBT
• Small Firms Loan Guarantee Schemes
• Bank Debt:
LOANS:
• Local Investment Funds:
– There are a few LIFs around ‘some’ countries
making loans to enterprises which benefit the
community.
92

93. Funding - Options
OTHER
• Factoring / Invoice Discounting:
• Leasing:
• Hire purchase, finance lease
93

94. Angel Investment Gust Platform
• Gust.com/entrepreneurs (deal flow
platform)
• Edit Business Details
• Upload a Video Pitch
• Share Documents Secularly
• Track Investor Activity
• Tips from Investors 94

95. 16 Common Questions about Fund Raising
– Steven McDermid
1. When should we raise capital; how do we time it
right?
- Raise money when you have sufficient cash runway
2. What does a typical company raising a Series C look
like, and what are the right milestones we need to hit
in order to ensure a successful raise?
- Alignment of capital to milestones
3. Should we ask for a specific valuation?
- Take the best offer that the market offers
4. How much capital should we raise?
- Be strategic about the amount of capital you raise
95http://a16z.com/2015/02/27/16-common-questions-about-fundraising/

96. 16 Common Questions about Fund Raising
– Steven McDermid
5. What investors should we target?
- Find investors appropriate for your stage of the
company
6. What are ‘crossover’ investors?
- Typically invests in public companies but also invest in
private companies
7. Should we include ‘strategic’ investors in our round?
- It may close some other doors
8. How many investors should we approach? Can’t I
approach just a select few?
- It is a balance
96http://a16z.com/2015/02/27/16-common-questions-about-fundraising/

97. 16 Common Questions about Fund Raising
– Steven McDermid
9. Can’t I just have a conversation with Investors? Do I
really need to prepare a full slide deck?
- Make those interactions count
10. How long does it take to raise a round?
- It takes time. Key is execution of the business
11.I’m worried about sharing confidential information.
How much information should we share – and when
should I provide customer references?
- No fear here
12.What kind of financial model should I provide to
investors?
- Understand your cash burn and financials 97
http://a16z.com/2015/02/27/16-common-questions-about-fundraising/

98. 16 Common Questions about Fund Raising
– Steven McDermid
13.Should we raise debt instead of equity?
- Debt is a good source of capital. But you do have to
repay debt
14.Should we use an advisor to help us raise the
round?
-Not every company needs an advisor
15.Should I sell some secondary stock?
- Maybe interpreted as a negative signal
16.What happens if I come up empty after running a
process, or if the market conditions turn against me?
- Make sure you have a plan B
98
http://a16z.com/2015/02/27/16-common-questions-about-fundraising/

99. raomal@LeanDisruptor.com | @raomal @LeanDisruptor | www.linkedin.com/in/raomal
RAOMAL PERERA
THANK YOU!

100. YOU ARE NEVER TOO SMALL TO MAKE A DIFFERENCE @raomal
100
APPENDIX

101. Additional Resources: Books
101

102. Additional Resources: Websites
Blogs:
• Ask the VC: http://www.askthevc.com/
• Venture Hacks: http://www.venturehacks.com/
• Building a Cap Table:
http://www.venturehacks.com/articles/cap-table
• Annotated Term Sheet:
http://ricksegal.typepad.com/pmv/files/3000000_term_sh
eet.pdf
• Guide to Stock Options:
http://www.naffziger.net/blog/2007/03/31/startup-stock-
options-isos-vs-nsos/
National Venture Capital Association
• Model Term Sheet and Financing Documents:
http://nvca.org/resources/model-legal-documents/
102

103. Additional Resources: Tools
103

104. 104
WORKSHOPS

105. Fund Raising for Entrepreneurs
105

106. Building Emotional Capital for Leadership
106

107. Business Model Innovation
107

108. How to Build a Startup
108

109. 109
MARKET TYPE

110. Technology and Market Insight
Technology Insight
• Moore’s Law
• New scientific
discoveries
• Typically applies to
hardware, clean tech
and biotech
Market Insight
• Value chain
disruption
• Deregulation
• Changes in how
people work, live and
interact and what
they expect
110www.steveblank.com

111. Examples of Technical Insight
 Ayasdi bring a groundbreaking new
approach to solving the world’s most
complex problems after a decade of
research at Stanford, DARPA and NSF.
Combining revolutionary technology
and methods for the imaging of
large-scale neural activity in a
naturally behaving subject, Inscopix
has developed the enabling means
to relate causal neural circuit
dynamics to corresponding behavior
111www.steveblank.com

112. Examples of Market Insight
 People want to play more involved games than
what is currently offered
 Facebook can be the distribution for such games
Masses of people are more likely to micro-blog
than blog
The non-symmetric relationships will allow
companies and individuals to self-promote
European car sharing sensibilities could be
adopted in North America
People, particularly in urban environments, no
longer wanted to own cars but wanted to have
flexibility.
112www.steveblank.com

113. Key Thought
What insight do I have that is
not yet conventional wisdom?
113www.steveblank.com

114. Market Type
Existing Re-segmented New
Customers Known Possibly Known Unknown
Customer Needs Performance Better fit Transformational
improvement
Competitors Many Many if wrong, few
if right
None
Risk Lack of branding,
sales and
distribution
ecosystem
Market and product
re-definition
Evangelism and
education cycle
Examples Google Southwest Groupon
Market Type determines:
 Rate of customer adoption
 Sales and Marketing strategies
 Cash requirements 114www.steveblank.com

115. Existing Market
Characteristics:
Customers are always hungry for
better performance
Incumbents exist
Usually technology driven
Positioning driven by product and
how much value customers place
on its features
Risks:
Incumbents will defend their turf
Network effects of incumbent
Continuing innovation 115www.steveblank.com

116. Resegmented Market
Low cost provider (Southwest)
Unique niche via positioning (Whole
Foods)
What factors can you eliminate that
your industry has long competed on?
Which factors should be reduced well
below the industries standard?
Which factors should be raised well
above the industry’s standard?
Which factors should be created that
the industry has never offered? (blue
ocean) 116www.steveblank.com

117. New Market
• Customers don’t exist today
• How will they find out about
you?
• How will they become aware of
their need?
• How do you know the market
size is compelling?
• Which factors should be created
that the industry has never
offered? (blue ocean)
117www.steveblank.com

118. 118
THE ELEVATOR PITCH

119. Why is an Elevator Pitch so Important?
• I’m bootstrapping my business – I don’t
need any funds – Why do I need an
elevator pitch?
• An elevator pitch will help you figure out
what’s at the core of your business.
119

120. Six Questions you must answer with
your Elevator Pitch
Start with a HOOK
1.What is your product or service?
2.Who is your market?
3.What is your revenue model?
4.Who is behind the company?
5.Who is your competition?
6.What is your competitive advantage?
End with an Ask 120

121. Sample Elevator Pitch
Ring tones are just the tip of the ice berg. Soon,
Mobile Network Operators will have access to a very
large revenue stream as a result of creating a 3G
Network. Network365 provide a payment platform for
value added services and products that can be either
directly integrated to the Billing system of providing
several channels to receive payment for these
additional services.
IDC estimates that the market for Internet Commerce
Applications is at $1.7B and expects it to top $13B by
2003.
Network365 will charge a license fee and a usage fee
to the Operators. We will also provide a ‘managed
services’. 121

122. Sample Elevator Pitch
Our team has the experience of building scalable
software platforms and has the experience of selling
to telecos. The CEO is was the co-founder of
ISOCOR, which was listed on NASDAQ and
delivered the second highest return to the lead
investor’s fund.
Our competitors are Qpass & i-Pin two companies in
the US also building payment platforms for mobile
operators.
122

123. Sample Elevator Pitch
Our differentiator will be our ability to penetrate
the Japanese market which is the most
advanced market for value added services.
We are anticipating $2million this round to be
used for employee building, increased office
space, entry into Japanese market.
We have a compelling two page executive
summary that I would like to send you. Can I
get your email address? 123

124. Take a few minutes to write down your
Elevator Pitch
• HOOK
• What is your product or service?
• Who is your market?
• What is your revenue model?
• Who is behind the company?
• Who is your competition?
• What is your competitive advantage?
• ASK
124