htw2011: michael a. jackson - raising seed capital

Raising Seed Capital

Michael Jackson@MAJACKS0N

michael.a.jackson@me.com

The Investor’s Perspective: Team, Product, Market

1. Do I love the team?2. Is this a (potentially) kickass product/service?3. Will people buy/use this product/service?4. How big’s the market?5. Do I understand the market?

The Investor’s Perspective: The Deal Itself

1. Do I want to lead this investment?2. What’s the right amount of money to invest?3. How much equity do I take?4. Are there comparables?5. How do I see the exit?

From The Startup’s Perspective: Right “Fit”

Ask Questions: Due Your Due Diligence!!!

Results of previous investments?

Get a list of their current investments

Ask for contacts at all their portfolio companies

How does my startup fit with your investment thesis?

What are your return expectations?

Do you have the right people in your network to help us succeed?

How much time do you dedicate to helping your investments?

Entrepreneur/Investor relationship is a Partnership…it’s gotta be mutually beneficial

Your Deck

10 Slides or Fewer!

Intro/Elevator Pitch

The Problem

Your Solution (w/Demo!)

The Team

Market Size

Business Model

Your Technology

Competition

Key Numbers & Metrics

How Much Money

Remember

• Be confident, not arrogant• Keep it direct and concise• Make it engaging and interactive• Have support slides

Things to Do

It’s all about minimizing an investor’s perceived risk, so…

• Set up a first-class advisory board• Be visible and engaged• Get “warm” intros• Build a great product and keep iterating

(money always finds great companies!)• Stay Positive!!!

Things to Avoid

Your main focus should be building a great company, not raising money so…

• Don’t “Pitch the Bitch”• Don’t waste time with investors with no money• Don’t bother with organized angel groups• A quick “no” is waaay better than a long

“maybe”• Don’t pay € for advice• Try and keep # of investors to a minimum• DO NOT give up a majority of your company

Online Resources

AngelList: http://angel.co/

Seedsummit: http://seedsummit.org/

VC Blog Directory: http://larrycheng.com/2011/01/19/venture-capital-vc-blog-directory-2011-edition/

Me: @MAJACKS0N