How to get funded

Hi! I’m Alexander Jarvis

• twitter.com/ADJBlog

• my.linkedin.com/in/alexanderdjarvis

• angel.co/alexander-jarvis

• www.facebook.com/50folds

Connect with Alexander

Confused how to raise?

Fundraising is, well…

But there is a basic process

You need to be smart, prepared and work hard

WORK HARD

RAISE WELL

What stage are you at?

• Idea, or have little traction you are Angel

• Take more risk, but smaller checks

• Need to get lots of them, generally through personal relationships

• May not need lead

• $100-300k check

Super early = Angel

• Team, some traction with functioning product = seed investors

• These are seed ‘VCs’ in Asia, can also add angels to ‘top up’

• Need a lead

• $500-1m check

We rolling = Seed investors

Requirements (What VC’s care about)

• So many founders simply ignore the fundamentals, but they are all that matter at the start

• If you don’t have an investible startup, keep working till you do and then go pitching

• Super-talented founders can attract $ with less traction and product, everyone else needs to prove they can execute and have semblance of product-market fit

• Remember, you are NOT entitled to $ so be humble

You can’t sell what no-one will buy (invest in)

“70% of my investment decision

of an early-stage company is the team”

Make it great!

Read about investible team

http://alexanderjarvis.com/blog/2015/05/05/investible-founding-startup-teams/

Read here!

Problem - make it painful

Broken thumb

Learn about problems

http://alexanderjarvis.com/blog/2013/10/27/your-solution-is-not-my-problem/

Read the blog here!

Solution: Aspirin not vitamin

10x better than alternative (This can

be inertia)

Big market => power distribution law (How

VC returns works)

Functioning, attractive product

Landing page pretty at least

• Ideas are a multiple of executionTraction

Clear go to market strategy

“Don’t give me 20 slides on your idea… give me 10 on

how you are going to do it!”

• Different kinds of investors, with • Different sector focus, and • Different check books

How much do you need?

How are you going to spend it to hit milestones

for next round?

What you need to prepare before raising

Pitch deck

yes, it’s in Word…

Template pitch deck

http://alexanderjarvis.com/2015/01/06/template-seed-stage-investor-pitch-deck-for-raising-venture-capital/

Get the FREE template here!

Pitch deck examples

http://alexanderjarvis.com/blog/2015/05/19/pitch-deck-collection-from-vc-funded-startups/

See 42 funded startup decks!

• Don’t let investors work hard • Investors will ask for more info • The more you spoon feed, the easier it will be • Create an appendix for common questions

• Numbers matter • If you have numbers, you need to give them • The later stage the company, the more they matter • They help remove risk in investors heads

Detailed deck

Financial model (The actual plan)

Financial model blog

http://alexanderjarvis.com/blog/2015/01/12/why-you-are-making-a-financial-model-for-your-fundraise-is-wrong/

Discover how to make a model that works for you!

Cap table (If complicated)

Cap table template

http://alexanderjarvis.com/blog/2015/01/08/ultimate-startup-cap-table-and-return-analysis-template/

Get the FREE template here!

• Give to contacts that make ‘warm intros’ • Take control of the ‘sales’ process

• Dear [x] • Pitch: Uber is challenging traditional taxis • Problem: It’s hard to find taxis, we solve this • Traction: Currently in 3 countries (SEA focus), signed

up 120 taxis, $15k MRR • Team: 5, Ex-Yahoo and SingTel • Raising: $500k Seed, $200 closed so far • Why 50Folds: Love experience in X and your

investment in Y • Hugs and kisses, • Travis, CEO, Uber

Template email for intros

List of investors and specific reasons why you want them

Practice!

How to approach investors

First find them. Make a list

•LinkedIN •AngelList •Google •Your network •CrunchBase •Read tech blogs for who invested in whom

•Ask friends

Start with crappy ones who don’t know millions from billions (Learn)

• See who knows them (LinkedIn) • Give them template email with specific reasons • Give them deck

Get warm intros to investors you want

Blitzkrieg. Keep the pace up, don’t lose momentum

Need to ensure investors are running on the same

timeline

One goal: Get the first meeting

Take small steps in each interaction

Then: make investors like YOU and get excited

Believe. If you don’t no-one else will. Share your belief

How to manage the process

The photo made me laugh…

One goal: Find a lead investor

Investor tracking sheet

Track name, date, interest, ticket size, status etc

Learn from feedback and reiterate pitch

Keep fixing your deck and pitch after you receive feedback.

Adjust size of round etc

Provide regular updates

Will take time, so keep everyone updated on progress

The round will rapidly come together once you have a lead

• Hey Alexander, • I created this for the investors who I'm in talks with currently. I thought I should reach out to you.

Since you guys gave me a genuine reason for a "No" in the past and not some random bullshit.

• Below is a quick update on our current status. • Quick Update mail: • 140 char pitch: Convert photos/images in content publisher websites into ad units. • Year founded: 2013. Revenue model - CPM. • Traction - 3-5 mn Impressions/day - $250-$320. • Current MRR: ~$10K-$12K. Current ARR: ~$100K- $140K. • ARR Aimed at before end of 2013 - $500K. • Amount raised: $~15K (Accelerator). Previous Investor - INVESTOR (www.INVESTOR.com). • Looking to raise- $500K. • Founders - 2. Team size - 6. Location- CITY. • Target Market:Global - Currently SE Asia, Australia, US. • Competitors:6 players (Globally - 1 acquired by XXX in MONTH 2014). • Market Share: 90% still left (According to datanyze). • Competitive advantage: Strategy - Programmatic first advertising. • Future plans: Expand - Videos,Mobile,Social.(5 Trillion images online). • Top publishers Include: COMPANY, COMPANY, COMPANY. • Top Advertisers Include: COMPANY, COMPANY, COMPANY.

• Let me know if there is any interest. Thanks. • P.S:Attached is a quick reference of our product.(10 slides only)* • Regards

Example update email

How to close

Get a lawyer

Not your uncle who does property law

Get a term sheet from the lead

This summarises the key terms (Any potential ‘deal

breakers’) Principally the terms are

about economics and control

Shop the term sheet for the best deal

Term sheets are gold for negotiation

Nothing makes VCs move faster than you getting one

of these

Get the followers in to close the round

Lead will help here a lot Followers are like sheep, you need to herd them

Keep growing business, you still are expected to hit targets!

Seriously, as talks progress they want to see updated numbers

up and to the right

Due diligence

Early companies don’t have much- so your incorporation

docs, HR agreements etc Later stage companies will

be in hell ;)

Negotiate definitive documentation

Read so you aren’t a dumb

ass

Keep working in case shit happens

Term sheets do get pulled, but not often VC looks bad if they do

Stay friends with VCs who participate in next round

If you have a competitive round, be nice and say you would love

to chat about the next round Remember! VCs know every

other VC

Close and get started (really, I mean started)

Closing a round isn’t a reason to celebrate. You

need to deliver now…

No Nos

Don’t do stupid things

VC’s are busy, don’t make things hard

Very frustrated man

If they ask for something, give it, unless it is silly

Be on time to meets Check your ego at the door

Quit your job after the raise

You have to be full time before you raise

Think VC’s invest in ideas

Setting up is cheap these days. VCs don’t want to pay for you to learn the basics…

• Pick who you trust • Assume your deck will find competitors though

Ask for an NDA

Don’t pitch a VC invested in your competitor. Check their

portfolio..

Insist on meeting before giving a deck

I have had founders ask for a meet and say they will share the idea when

we meet…

Blog: Why I want a deck before a pitch

http://alexanderjarvis.com/blog/2014/07/17/why-i-want-a-pitch-deck-before-a-pitch/

Read the blog here!

• One founder is 100% on raise, other runs business

Treat raising as a distraction

Use Word, or make deck too long

Don’t Do

Write long emails to people (Please!!!)

Omit key info they need - VCs don’t waste time

Keep your idea a secret