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FundRaising  101

@malayeri

Tuesday, May 6, 14

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Resource

Check  out  www.karya.ir  for  more  on  

fundraising  in  Farsi

Venture  Deals

Great  Book  by  Brad  Feld  and  Jason  

Mendelson

Tuesday, May 6, 14

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Players

•  Entrepreneur•  Venture  Capital•  Angel  Investor•  The  Lawyer•  The  Mentor

Tuesday, May 6, 14

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Stages•  Seed  Stage•  Early  Stage✴  Series  A

✴  Series  B

•  Mid  Stage

✴  Series  C

✴  Series  D

•  Late  Stage✴  Series  E

✴  Series  F

•  EXIT  (IPO  -­‐  M&A)

Tuesday, May 6, 14

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Team  ...

Tuesday, May 6, 14

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Team  ...

They  invest  in  teams  not  ideas!

It  is  all  about  your  team  ...

Vision  +  Commitment  (NOT  INVOLVEMENT)

Where  to  find  your  ideal  team?School?  MBA?  StartupWeekend?

Create  your  Minimum  Viable  Team  (MVT)

Tuesday, May 6, 14

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Size  Ma7ers!

Tuesday, May 6, 14

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Size  Ma7ers!How  many  members?

1:  Slow  -­‐  Lonely2:  Magic!  1  builds,  1  sells3:  great  customer  development  team4:  Crazy!5:  WHAT??!

Investors  care  about  your  background

Tuesday, May 6, 14

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What  else?

Tuesday, May 6, 14

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What  else?

They  want  to  know  about  your  advisors

You  need:

MENTORSCOACHESADVISORS

GOD  FATHERSFRIENDSNETWORKCUSTOMERS

Tuesday, May 6, 14

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Types  ...

Tuesday, May 6, 14

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Types  ...Smart  Money  vs.  Dumb  Money  (Hands-­‐off  Investors)

Types  of  Investors:•  FFF:  Family,  Friend,  Fool•  Angels:  Usually  successful  entrepreneurs  who  are  inves]ng  their  own  money  from  the  industry  they  profited  from  to  startups  as  seed  inves]ng.•  VC:  Venture  capital  is  the  funding  resul]ng  from  professional  managers  inves]ng  other  people’s  money  in  startups  and  early-­‐stage  companies  in  order  to  generate  high  rates  of  return.

Tuesday, May 6, 14

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Angel  vs.  VC

Tuesday, May 6, 14

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Angel  vs.  VCAngel VC

Less  Money More  Money

For  Fun For  Profit

Quick Slow  (~12months)

No  Control Lots  of  Control

Don’t  ask  for  NDA  from  your  investor

Tuesday, May 6, 14

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Fundraising  Material

Tuesday, May 6, 14

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Fundraising  Material

•  ExecuLve  Summary  

•PresentaLon  Deck•  Demo  /  Prototype  (More  important  than  BizPlan)

•  Business  Plan  (Trend  is  changing  but  s]ll  valuable)•  Financial  Model  (The  earlier  stage  the  startup,  the  less  accurate  any  predic]on)  (Revenue  Forecast,  Monthly  Burn  Rate)

•  Due  Diligence  Materials

Tuesday, May 6, 14

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Investor  Pitch  ...

Tuesday, May 6, 14

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Investor  Pitch  ...Tell  Your  Story

Momentum  -­‐  Vision  -­‐  Team

Gain  trust  in  your  team  -­‐  product  -­‐  market

Don’t  over  sell  (or  sell  too  hard)

Tuesday, May 6, 14

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There are only a few key things most VCs look at to understand and get excited about a deal: • the problem you are solving, • the size of the opportunity, • the strength of the team, • the level of competition or competitive advantage that you have, • your plan of attack, • and current status.

Tuesday, May 6, 14

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Pitch  Deck...

Tuesday, May 6, 14

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Pitch  Deck...Elevator  Pitch

ProblemSolu]on

Market  SizeBusiness  ModelCompe]]on

Go-­‐to-­‐Market  StrategyTeam  /  Hire

Money  /  Milestone

Tuesday, May 6, 14

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ValuaLon  ...

Tuesday, May 6, 14

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ValuaLon  ...Investment  is  about  how  much  you  need

Startup  valuaLon  is  an  art

You  need  validated  business  model  with  trac]on  not  Business  Plan

Post  Money  VS.  Pre  Money  Valua]on

Tuesday, May 6, 14

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create a dog race to increase valuation

Tuesday, May 6, 14

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Note!

•  It  is  a  long  term  process!  Be  Pa]ent  

specially  if  dealing  with  VC

•  Get  ready  for  at  least  5  years  of  commitment!

Tuesday, May 6, 14

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Simple  Terms  in  Terms  Sheets

•  Control  Terms

✴  Board  of  Director

•  Other  Terms

✴  Dividends

✴  First  Right  of  Refusal

✴Employee  Op]on  ISOP

Tuesday, May 6, 14

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Simple  Terms  in  Terms  Sheets

•  Economic  Terms

✴  Price  (Valua]on  -­‐  Post  Money,  Pre  Money)

✴  Ves]ng

✴  An]-­‐Dilu]on

•  Control  Terms

✴  Board  of  Director

•  Other  Terms

✴  Dividends

✴  First  Right  of  Refusal

✴Employee  Op]on  ISOP

Tuesday, May 6, 14

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QuesLons?

Tuesday, May 6, 14