Fundraising Demystified

Angela Lee

Founder, 37 Angels

Assoc. Dean & Chief Innovation Officer, Columbia Bus. School

What we’ll cover today

VCs and Angels – what’s the difference?

New York, New York

Pitching pitfalls

2

Venture Capital

Decision

maker

GP

LP LP LP LP LP

How they

make moneyGPs: mgmt. fee & carry

LPs: fund returns

Networks: dues

Angels: returns

“Flavors”Standalone

CorporateStrategic

Financial

Solo

Networks

Geog.

Sector

Affinity

Angel Investing

A A A A

A A A A

3

Other differences

4

Investment thesis

Speed

Cat herding

What we’ll cover today

5

VCs and Angels – what’s the difference?

New York, New York

Pitching pitfalls

Valuations

6

Got data?

“Angel List Valuations”

7

8

angel.co/valuations

Valuations

Level of syndication

Equity vs. notes

9

What we’ll cover today

10

VCs and Angels – what’s the difference?

New York, New York

Pitching pitfalls

What do you look for in diligence?

Progress Price

People Problem

11

What do you look for in diligence?

Progress Price

People Problem

12

13

Who is their customer?

14

Who is the customer?

Demographic

• Gender

• Age

• Income

• Location

Psychographic

• Personality

• Interests

• Values

• Lifestyle

15

Who is the customer?

Demographic

• Gender

• Age

• Income

• Location

Psychographic

• Personality

• Interests

• Values

• Lifestyle

Use case

• Pain point

• Problem solved

• Value added

• Message to use

16

Who is the customer?

All hotels are booked

I want a cheaper option

I want a home away from home

I desire a unique travel experience

17

Who is the customer?

18

What do you look for in diligence?

Progress Price

People Problem

19

How are you acquiring customers?

We’ve done no

marketing!

We only need to

capture 1% of

the market….

20

Example 1 – B2C

Campus

Tabling

Response best with x

message at y time

Direct

MailSEO

Influencer

MarketingEmail

Campus ambassador = $40/hr

Cost to acquire customer (CAC) = $20

($40 + $20 in other costs / 3 customers)

Customer lifetime value (CLV) = $100

(Box costs $20, 5 months typical)

100 parents walk by in 1 hour

20 give email address

10 open email

3

Cust.

21

Example 2 – B2C

Email

Email 10,000 people

1,000 open email

200 click call to action

100

Cust.

We tested message A/B/CMessage C works best

Direct

MailSEO

Influencer

Marketing

Campus

Tabling

CAC = $30

CLV = $100

X months later, how

many customers active?

22

Example 3 – B2B

Cold

Calling

Identified decision maker

and path to them / purchase

Direct

MailSEO

Trade

shows

Referral

Partners

Salesperson salary = $10K/mo

CAC = $10K

CLV = $30K?

Retention rate in year 2 = ?

50 cold calls a month

10 meetings with leads

4 meetings with

purchaser

1 Client

Team knows timing to

close (SMB / enterprise)

23

TractionBook.com

24

Tractionbook.com

25

1) Viral Marketing

2) Public Relations (PR)

3) Unconventional PR

4) Search Engine Marketing

5) Social and Display Ads

6) Offline Ads

7) Search Engine Optimization

8) Content Marketing

9) Email Marketing

10) Engineering as Marketing

11) Target Market Blogs

12) Business Development

13) Sales

14) Affiliate Programs

15) Existing Platforms

16) Trade Shows

17) Offline Events

18) Speaking Engagements

19) Community Building

Testing your MVP

26

*Landerapp.com and Launchrock.com have templates for creating landing pages

Testing your MVP

27

Letter of Intent

This year, we will conduct an

unpaid pilot with startup ABC.

When features x, y, and z are built,

we will pay $x per employee, or $y

a month to use their tool / platform.

Resources

• 10 Pitch Slides (Slideshare AngelaWLee)• 16 Startup Metrics (Andressen Horowitz)

• Lean Startup by Eric Reis• Traction by Gabriel Weinberg

37angels.com/resources