My presentation at The Collide Center in McKinney, where I introduce my "rule of five" to measure the readiness of early stage startups for raising money.

1. Eureka! I have an
idea… now what?
Funding strategies for early stage
startups
Cristiano B. M. Oliveira
Collide Center, 03/18/14

2. A little about myself…
Technology Entrepreneur!
Active on the startup community as
founder, executive, advisor, investor!
Former Founder/CTO at Spring Wireless
(Enterprise Mobile/SaaS Applications),
$100M in annual sales, successful exit!
B.S., M.S. in Engineering, Universidade de
São Paulo (Brazil); Executive Programs,
Singularity University (USA), FGV (Brazil)!
Share my time between Texas (family),
California (work) and Alaska (fun :-))

3. Disclaimer
Each investor has a
different perspective of the
world, so take this
presentation as a reference
and not an universal truth

4. Defining the topic
Funding strategies for early stage startups
What is a startup? An organization
formed to search for a repeatable and
scalable business model. (Steve Blank)

5. Stage/
Attributes
Maturity Funding Risk
Early
No/Low
Revenues
Product &
Marketing
Way Higher
Growth
Revenues but
no/low profit
Working
Capital
Medium
Late
Revenues
and profits
Expansion/
IPO
Lower
Defining the topic
Funding strategies for early stage startups

6. Defining the topic
Funding strategies for early stage startups
Bootstrapping
(your time/
savings)
Family,
Friends &
Fools
Government/
Corporate
Grants
Crowd
funding
Paying
Customers
Venture
Capital

7. Got it… but now what
do I need to raise
money from investors
for my new venture?

8. When on both sides of
the table, raising or
investing, I apply the
following rule of five

9. Rule #1: a hyper growth,
billion dollar market
Example: Square, Mobile Payments
Value to be!
captured
Future
Valuation

10. Rule #2: an industry
metric improved by 10x
Example: SpaceX, Space Exploration
10x cheaper to take 1lb to
Low Earth Orbit on SpaceX Falcon
= strong value proposition/creation

11. Rule #2: an industry
metric improved by 10x
Example: Apple, Music Player
10x more songs than
any MP3 player at that time
bo
n
u
s
slid
e
;-)

12. Rule #3: initial market
proof and traction
Example: AirBnB, Hospitality Marketplace
users on temporary housing!
site couchsurfing,com
temporary housing listings on SF &!
NYC Craigslist from 07/09 - 07/16
It is way easier, but you don’t necessarily need
data from your own product to prove a point

13. Rule #4: recurrent,
simple revenue model
Example: Duolingo, Free Language Learning
Monetization = content translation = members
practice on crowdsourced translations to
companies that pay Duolingo (CNN, BuzzFeed)

14. Rule #5: team members
fit and track record
Example: LinkedIn, Professional Social Network
Successful track record in startups
Assure operations could run to scale
Experience in the social space
Deep technology capabilities
Understanding of product-market fit
Deep technology capabilities
Strong analytical skills
Tech team from engineering powerhouses

15. Final thoughts
1. “A talented team (5) delivering substancial value
(2) in an emerging market (1), with an initial
proof/traction (3) and monetization model (4)”
2. Modern startups are now engineered, so early
stage investors have moved from gut feeling to
a metric, fact-based approach.
3. Other topics outside my “rule of five”: company
roadmap, competition/defensibility, financial
projections, deal terms, who else is investing.

16. Keep in touch!
!
http://about.me/cbmo