The Art of Raising Capital for Technology Startup Leaders
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Oct 7, 2012 Delivered at Silicon Valley Code Camp
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The Art of Raising Capital for Technology Startup Leaders
- 1. The Art of Raising Capital for Technology Startup Leaders Bruce Schechter Oct 7, 2012
- 2. Here's to the crazy ones, the misfits, the rebels, the troublemakers, the round pegs in the square holes. The ones who see things differently. They're not fond of rules. And they have no respect for the status quo.... While some see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the one's who do. - Steve Jobs
- 3. Enough about You, Let’s talk about Me
- 4. Enough about You, Let’s talk about Me
- 5. Enough about You, Let’s talk about Me
- 6. Enough about You, Let’s talk about Me
- 7. Enough about You, Let’s talk about Me
- 8. Your Mileage May Vary
- 9. In Order to change the world, you have to first get your head together
- 10. In Order to change the world, you have to first get your head together - Jimi Hendrix
- 11. Funding Rounds “Friends & Family” Angels VC - Series A VC - Series B 0 2 4 6 8 $M
- 12. Early Funding Sources • “Bootstrapping” • “Friends and Family” • Corporate, “Strategic”... (Intel Capital..) • Government Grants, Research Grants... • Debt Financing... i.e., a loan • Angels • VC • Or....
- 13. Incubators (...we are so lucky to be here in SV!) • Plug & Play Tech Center(s) • Y Combinator • i/o Ventures, DogPatch, RocketSpace... • Silicon Valley Bank Accelerator • Founders Institute • Cleantech Open • Stanford StartX • US Market Access Center (International)
- 14. Fundraising Tools Elevator Pitch
- 15. Fundraising Tools Elevator Executive Pitch Summary
- 16. Fundraising Tools Elevator Executive PPT Pitch Summary Deck
- 17. Fundraising Tools Detailed Elevator Executive PPT Financials Pitch Summary Deck & DD
- 18. First, a few words about.... The Art of Fundraising
- 20. Awesome Product! Amazing Tech!
- 21. Will I Achieve a Vast Return? Is She Capable of Awesome Product! Growing a Business? Amazing Tech!
- 23. “The Curse of Knowledge”
- 25. “I saw the angel in the marble and carved until I set him free” - Michelangelo
- 28. The Art of the Elevator Pitch Detailed Elevator Executive PPT Financials Pitch Summary Deck & DD
- 29. Example Elevator Pitch From: Bruce Schechter (bruce@schechter.com) Date: Mon, 8 Nov 2012 8:23am To: Ted Fellows (ted@prodigiousVC.com) Subject: Intriguing Company in Life Sciences Hi Ted, Hope you are doing well, and that the golf game is looking good. Please allow me to introduce to you a company called FlextroTech Sciences, which is currently starting human trials on a new device which promises to cut the cost of knee replacement surgery by 60% and increase resulting ambulatory responsiveness by 30%. They have several medical supply distribution partners already prepared to ink deals, upon completion of trials. Their CEO previously ran sales at Medtronic and their CTO is a U Penn trained MD. Might I follow up with an Executive Summary, or better yet give you a verbal update by phone? Cheers, Bruce Bruce Schechter, (m)408.219.0342, www.schechter.com
- 30. The Art of the Executive Summary Detailed Elevator Executive PPT Financials Pitch Summary Deck & DD
- 33. 1. TLDR “Too Long; Didn’t Read” Any over-wordy thread that people don't read, but reply to anyway.
- 34. I would have written a shorter letter, but I didn’t have the time. - Blaise Pascal
- 35. Executive Summary = One Page
- 36. Executive Summary = One Page • Longer than one page ➛ “I’ll read this later”
- 37. Executive Summary = One Page • Longer than one page ➛ “I’ll read this later” • “People don’t buy what they don’t understand”
- 38. Executive Summary = One Page • Longer than one page ➛ “I’ll read this later” • “People don’t buy what they don’t understand” • “Investors don’t fund products, they fund businesses”
- 39. Executive Summary = One Page • Longer than one page ➛ “I’ll read this later” • “People don’t buy what they don’t understand” • “Investors don’t fund products, they fund businesses” • Maximize repeatability
- 40. Bruce’s Hot Button Do not... Tell me all that’s good about your company before you.... Fundamentally explain what you do = “foundation”
- 41. Executive Summary • Problem Statement • Solution • Market Opportunity • Competition • Business Model • Go to Market Strategy • Progress to Date, Milestones • Revenue • Team
- 43. Problem/Solution Overview • Clarity of Pain: credibility
- 44. Problem/Solution Overview • Clarity of Pain: credibility • Investors seek “must-have” not “like to have”, in the eyes of customers
- 45. Problem/Solution Overview • Clarity of Pain: credibility • Investors seek “must-have” not “like to have”, in the eyes of customers • Site tangible evidence
- 46. Problem/Solution Overview • Clarity of Pain: credibility • Investors seek “must-have” not “like to have”, in the eyes of customers • Site tangible evidence • Tie Solution back to Pain
- 47. Problem/Solution Overview • Clarity of Pain: credibility • Investors seek “must-have” not “like to have”, in the eyes of customers • Site tangible evidence • Tie Solution back to Pain • Goal: memorable and repeatable !! Can the reader repeat to colleagues?
- 49. Market Opportunity • Total Market and Available Market
- 50. Market Opportunity • Total Market and Available Market • Ideal: Reference third-party data
- 51. Market Opportunity • Total Market and Available Market • Ideal: Reference third-party data • Proof points or analogous products
- 52. Market Opportunity • Total Market and Available Market • Ideal: Reference third-party data • Proof points or analogous products • Aim for a repeatable narrative
- 53. Market Opportunity • Total Market and Available Market • Ideal: Reference third-party data • Proof points or analogous products • Aim for a repeatable narrative • Nice to have: Narrative “equation” (if we sell X to Y at $Z we’ll achieve $N)
- 54. Competition
- 55. Competition • Be honest and open
- 56. Competition • Be honest and open • Worst possible wording: “We don't really have competition”
- 57. Competition • Be honest and open • Worst possible wording: “We don't really have competition” • Focus more on your advantage than on competitor strengths !
- 58. Business Model
- 59. Business Model • Be clear who buys what from whom, for what price, how often, etc
- 60. Business Model • Be clear who buys what from whom, for what price, how often, etc • Define the unit economics, individual transaction cost
- 61. Business Model • Be clear who buys what from whom, for what price, how often, etc • Define the unit economics, individual transaction cost • If there are other players/partners, be sure to be clear where you fit into the picture
- 62. “Go To Market” Strategy
- 63. “Go To Market” Strategy “The Bi g D og!”
- 64. “Go To Market” Strategy • Customer Acquisition: Direct Sales? Channels? Word of Mouth?.... “The Bi g D og!”
- 65. “Go To Market” Strategy • Customer Acquisition: Direct Sales? Channels? Word of Mouth?.... • Key Marketing Tactics: PR? SEO/ SEM? Advertising? Social “The Bi g Networking?.... D og!”
- 66. “Go To Market” Strategy • Customer Acquisition: Direct Sales? Channels? Word of Mouth?.... • Key Marketing Tactics: PR? SEO/ SEM? Advertising? Social “The Bi g Networking?.... og!” D • Put strong focus on near-term, ~6-12 months, granular steps
- 68. Progress, Milestones • Brag about accomplishments up to now
- 69. Progress, Milestones • Brag about accomplishments up to now • Be clear that you know your next steps, particularly in next 6-12 months
- 70. Progress, Milestones • Brag about accomplishments up to now • Be clear that you know your next steps, particularly in next 6-12 months • Overwhelmingly, focus on customer- oriented milestones more-so than product
- 71. Progress, Milestones • Brag about accomplishments up to now • Be clear that you know your next steps, particularly in next 6-12 months • Overwhelmingly, focus on customer- oriented milestones more-so than product • Traction is the watchword
- 72. Team
- 73. Team • Give everyone a title
- 74. Team • Give everyone a title • Evidence of “done it before”
- 75. Team • Give everyone a title • Evidence of “done it before” • List advisors with credibility or “brand”
- 76. Team • Give everyone a title • Evidence of “done it before” • List advisors with credibility or “brand” • The game is credibility... save details for later
- 77. Executive Summary - What NOT to do...
- 78. Executive Summary - What NOT to do... • Cosmetic graphics, drop shadows, etc... “Just the facts, ma’am”
- 79. Executive Summary - What NOT to do... • Cosmetic graphics, drop shadows, etc... “Just the facts, ma’am” • Domain-specific language
- 80. Executive Summary - What NOT to do... • Cosmetic graphics, drop shadows, etc... “Just the facts, ma’am” • Domain-specific language • Unstated assumptions
- 81. Executive Summary - What NOT to do... • Cosmetic graphics, drop shadows, etc... “Just the facts, ma’am” • Domain-specific language • Unstated assumptions • Tiny fonts
- 82. Executive Summary - What NOT to do... • Cosmetic graphics, drop shadows, etc... “Just the facts, ma’am” • Domain-specific language • Unstated assumptions • Tiny fonts • “Year 1,Year 2,....”
- 83. Executive Summary - What NOT to do... • Cosmetic graphics, drop shadows, etc... “Just the facts, ma’am” • Domain-specific language • Unstated assumptions • Tiny fonts • “Year 1,Year 2,....” • “We hope...”, “We aim to...”
- 84. Test, Refine, Test, Refine, Test, Refine, Test, Refine....
- 85. Test, Refine, Test, Refine, Test, Refine, Test, Refine.... • Your team (who needs to be able to repeat)
- 86. Test, Refine, Test, Refine, Test, Refine, Test, Refine.... • Your team (who needs to be able to repeat) • Your mother. ☺
- 87. Test, Refine, Test, Refine, Test, Refine, Test, Refine.... • Your team (who needs to be able to repeat) • Your mother. ☺ • Friends
- 88. Test, Refine, Test, Refine, Test, Refine, Test, Refine.... • Your team (who needs to be able to repeat) • Your mother. ☺ • Friends • Advisors
- 89. Test, Refine, Test, Refine, Test, Refine, Test, Refine.... • Your team (who needs to be able to repeat) • Your mother. ☺ • Friends • Advisors • Investors (who are not so important)
- 90. Test, Refine, Test, Refine, Test, Refine, Test, Refine.... • Your team (who needs to be able to repeat) • Your mother. ☺ • Friends • Advisors • Investors (who are not so important) • Investors (“FTW”)
- 91. The Art of the Pitch Detailed Elevator Executive PPT Financials Pitch Summary Deck & DD
- 92. The Pitch Deck Follows Exec Summary Outline
- 93. The Pitch Deck Follows Exec Summary Outline
- 94. The Pitch Deck Follows Exec Summary Outline
- 95. Simplicity is the ultimate sophistication. - Leonardo da Vinci
- 96. Guy Kawasaki The 10-20-30 Rule
- 97. Guy Kawasaki The 10-20-30 Rule • 10 Slides
- 98. Guy Kawasaki The 10-20-30 Rule • 10 Slides • 20 Minutes
- 99. Guy Kawasaki The 10-20-30 Rule • 10 Slides • 20 Minutes • No Font < 30pts ( This is 42pt, BTW )
- 100. Guy Kawasaki The 10-20-30 Rule • 10 Slides • 20 Minutes • No Font < 30pts ( This is 42pt, BTW )
- 103. In Review...
- 104. In Review... • Tell ‘em how they’ll make a fortune
- 105. In Review... • Tell ‘em how they’ll make a fortune • Investors fund companies, not products
- 106. In Review... • Tell ‘em how they’ll make a fortune • Investors fund companies, not products • They don’t fund what they don’t understand
- 107. In Review... • Tell ‘em how they’ll make a fortune • Investors fund companies, not products • They don’t fund what they don’t understand • Watch Steve Jobs videos
- 108. Bruce Schechter The Schechter Company, LLC www.schechter.com
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- How many of you have ideas for a new venture?\nHow many are executing on the idea?\nHow many are full time on the new venture?\nWorking day job while executing in off hours?\nStarted raising money already? - already met investors?\n
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- Do you need outside funding\n
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- Any guess what the investors are thinking?\n
- Any guess what the investors are thinking?\n
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- How many of you are engineers as a primary role in whatever venture?\n\n\n\n
- How many of you are engineers as a primary role in whatever venture?\n\n\n\n
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- Please, please... go Google it.\nYou wont remember what I said here, but you&#x2019;ll have this permanent reference...\n
- Please, please... go Google it.\nYou wont remember what I said here, but you&#x2019;ll have this permanent reference...\n
- Please, please... go Google it.\nYou wont remember what I said here, but you&#x2019;ll have this permanent reference...\n
- Please, please... go Google it.\nYou wont remember what I said here, but you&#x2019;ll have this permanent reference...\n
- You are accustomed to internal, corporate, operational presentations.\nEveryone knows the background and lingo.\nAn investor presentation is NOT that.\nI&#x2019;ve literally had VCs advise founders: &#x201C;make it so my mother will understand it&#x201D;\n
- Take time to watch a couple of Steve&#x2019;s product/keynotes!\n
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