Presentation from "Hacking B2B SaaS Fundraising" event to share my experience fundraising at Simply Measured. Vijay Nagappan from MHS Capital hosted the event at WeWork Labs in San Francisco with SVB sponsoring. We specifically talked about my experience fundraising and some of the specific best practice for B2B SaaS companies raising venture capital.

1. Hacking B2B
SaaS Fundraising

2. Who We Are
Vijay Nagappan
@vijaynagappan
B2B Investments:
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3. Who We Are
Adam Schoenfeld
CEO & co-founder
@schoeny
@simplymeasured
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4. DISCLAIMER
• This discussion is based on the experience of
one company - there are tons of different
paths to success in fundraising and plenty has
been written about general best practices.
• The specifics of our story are most relevant to
B2B SaaS companies.
• I’m not a professional, but did play one on TV
this one time.
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5. Agenda
I. BEFORE YOU COMMIT
II. PREPARING TO PITCH
III. PLANNING/STAGING THE PROCESS
IV. MANAGING THE PROCESS
V. PICKING THE RIGHT PARTNER
VI. LESSONS/HACKS/THINGS TO AVOID
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6. Before You
Commit: Internal
Questions to
Answer
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7. Options and Trade-offs?
Small VC - $1-4M Bootstrap
Larger VC - $5-10M Alternate Financing
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8. How We Made Our Decision
• Believed* The Business Could Be “Big.”
• Believed* The Market Was There.
• Founders Willing to Commit. Gas in The Tank
and Having Fun
• Small Raise Would Not Allow Enough
Behavior Change vs. Bootstrapping.
* = had data + validation + conviction
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9. What Are You Optimizing?
• Price and Terms
• Partner/Team
• Firm(s)
• Time/Business Distraction
• EVERYTHING
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10. Preparing to Pitch:
Take Care of the
Details
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11. First, Build a Business
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12. Pick Your “Team” For The Process
Who is going to help through the
process? What role will they play?
• Co-founders?
• Seed investors?
• Advisors?
• Other?
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13. Create Your Pitch Materials
• 1 Paragraph Summary for Intros
• Pitch Deck
• Diligence Materials
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14. How We Got There
1. Spun our wheels making a deck and thinking we
were ready to pitch
-- RESET --
1. Started with a short, tight narrative.
2. Nailed the narrative before building our deck.
3. Boiled down the narrative to an intro email.
4. Created our pitch deck – same story, but add
pretty pictures and steep graphs.
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15. Our Narrative
Simply Measured is Reporting as a Service.
Headline/ Background/Highlights: $NNNK in Monthly Recurring Revenue. NNNN
Wow Metric Customers. Cash flow break-even. All inbound – never made a cold call.
Done it with just $900K in total funding
Business users increasingly need data, but have a fundamentally
Problem/ different need.
Solution Nobody has re-engineered the reporting business process around these
needs.
Simply Measured solves this problem with “reporting as a service”
Turns data to deliverables - your own analyst with a click
Traction We started with social media analytics.
Validated that this approach works. Leads, Customers, Revenue, and
now customers are pulling us into additional marketing use cases.
What’s Unique light-weight customer acquisition, unit economics that are ripe
to scale.
Special? Our plan is to expand our reporting as a service model deeper into
marketing and beyond.
We’re defining a new category in a $34B market.
Vision Raising 8M to grow sales, spend on marketing, build out expand
platform and use cases served.
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16. Our Email Intro
Simply Measured is a SaaS company that provides simple, beautiful reporting
for business users. Their "reporting as a service" approach makes data
analytics accessible for business users - no data science degree or IT
involvement required. Since MHS Capital invested 1 year ago, the company
has grown MRR by 6x, is now at a $___mm run rate, is break-even/profitable,
has ___customers and ________users, all acquired through an inbound
marketing model. Simply Measured plans to leverage its growing foothold
with companies like Amex, Microsoft, AOL, and Playboy to define a new
category around reporting in the $34B Analytics & BI market.
Adam is just starting to speak to investors about their next round and wanted
to make sure you meet them early in the process. Adam is scheduling a trip to
the bay area in the next week or two. Hopefully you will get a chance to meet.
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17. Nail The Delivery
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18. Diligence Materials We Prepped
• Operating Dashboard with Key SaaS Metrics
• Financial Model/Projections
• Unit Economics: LTV & CAC Model
• Diligence Q&A (Living Document)
• Product Roadmap
• Customer List
• Historical Financial Statements
• Customer & Personal References
• Past Transaction Documents
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19. Things We Were Asked for That We
Didn’t Prepare
• Segmentation of Churn by Reason & Type
• List of Churned Accounts by Price
• Cohort Analysis
• Customer Job Title Distribution
• Usage Data By Product Module/Feature/Report
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20. Delivering Diligence Materials
Doesn’t Have to Suck
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21. Planning/Staging
The Process:
Preparation Matters
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22. Who to Pitch?
Funded
Similar Cos
.
Fund Size &
Won with
Check Size. .
Similar Cos
.
Stage Focus
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23. Deals We Looked At
• Marketo, Eloqua, Box – SaaS winners with similar
business models
• Hubspot, Marin Software – similar pricing and go-to-
market model
• Buddy Media, Hootsuite, Sprinklr – adjacent
business, same market
• Chartbeat, Flurry, Tableau – similar offering/problem
space
• Competitors – Exclude Their Investors
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24. How We Phased Intros & Meetings
• Create Theoretical Firm Ratings*
• Phase Intros/First Meetings into Groups:
• First Group – 30% of total
• Second Group – 60% of total
• Third Group – 10% of total. Save for later.
*Theoretical, because there is a lot you don’t know until you talk to people. Someone
you think loves your space may hate it, someone you think is too large may be looking
for smaller deals, etc.
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25. How Many Firms? Our Top of The
Funnel
Initial List of ~30
Narrowed to ~20
First Meetings
with ~15
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26. Managing The
Process: Understand
Goals at Each Stage
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27. Timeline
First Follow-up Partnership Final
Meetings Meetings Meetings Meetings
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28. First Meetings
Goal: Get Them to Want a 2nd Date
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29. Follow-up Meetings
Goal: Get Them To Fall in Love
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30. Partnership Meetings
Goal: Handle Objections, Sell Yourself
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31. EVEN MOAR MEETINGS??
Goal: Get a Term Sheet or Move On
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32. Gauging Interest….
• I love it! I’ve been searching for a company like this.
• What is your schedule like the rest of the day?
• Can I get you scheduled to meet with _____?
• What is your timeline for closing a round?
• Thank you for coming by, I’d like to talk again.
• Good luck.
• Is this competitive with [portfolio company]?
• Sorry, can you repeat that? I was checking email.
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33. Timing the Conclusion
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34. • Use existing investors & advisors to give
guidance about timing/demand
• Be honest and direct if a firm is falling
behind
• Give a specific timeline
• Lean on your travel/business schedule
• Be honest and direct that you are running a
full process
• Send diligence items in stages
• Hold off customer references until there’s a
strong signal of commitment
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35. Picking The Right
Partner: Remember
What’s Important to
You
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36. Come Back to These Things
• Price and Terms
• Partner/Team
• Firm(s)
• Time/Business Distraction
• EVERYTHING
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37. How We Decided
1. Alignment with company & founder
personal values, goals, and style
2. Size and relevance of network
3. Specific SaaS Expertise
4. Terms
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38. Misc Hacks & Lessons:
Tips, Reminders and
Resources
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39. • Do Screencasts of the pitch to share for feedback.
• Hire an Admin. Scheduling is brutal.
• Monitor your energy during the process.
• When something feels wrong, take a step back.
• Use the opportunity to learn + get feedback.
• Don’t forgot to negotiate.
• Don’t forgot to ask questions of VCs (incl. qualifying)
• You always have options.
• Have fun with it
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40. “Crafting the Pitch”
• Venture Hacks: http://venturehacks.com/pitching
• Bessemer 10 Laws of Cloud / SaaS: http://www.bvp.com/cloud
• Sequoia Capital: http://www.sequoiacap.com/us/ideas
• Canaan Partners: http://www.slideshare.net/canaanpartners/canaan-
entrepreneur-pitchbook-presentation
• Tim Young: http://techcrunch.com/2010/11/02/365-days-10-million-3-
rounds-2-companies-all-with-5-magic-slides/
• Jon Bischke: http://jonbischke.com/2009/11/13/a-dozen-of-the-best-
start-up-pitches-on-the-web/
• SEO Moz: http://www.slideshare.net/randfish/seomoz-pitch-deck-july-
2011
• Business Insider: http://www.businessinsider.com/the-best-startup-
pitches-of-all-time-2012-11?op=1
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41. Understanding the SaaS Business
• David Skok: http://www.forentrepreneurs.com/
• Bessemer 10 Laws of Cloud / SaaS: http://www.bvp.com/cloud
• Chaotic Flow: http://chaotic-flow.com/
• Jason Lemkin: http://www.saastr.com/
• David Cummings: http://davidcummings.org/
• Bob Warfield: http://smoothspan.wordpress.com/
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