Fundraising in Silicon Valleywith 500 Startups

Prepared by Sean Percival in partnership with Startup Norway

500 Startups at a Glance

“500 Startups is the most active seed investor in Silicon Valley tech companies”

The Silicon Valley Tech Venture Capital Almanac, Fall 2013

950+Investments

$100MDeployed

4Years

500 Startups Values

•Be Bold, Be Humble•Move Fast, Break Things• Challenge Yourself, and Others•Be Diverse, and Diversified •Have Fun, Make Money

About the 500 Startups Accelerator

• Next program starts in Mid-April (and every 3-4 months)• Program runs for 3.5 months• Demo Day sometime in August

• We make a $100K investment for 7% of your company• There is a $25K program fee• We invest through a convertible security structure

Upcoming Dates

Investment Details

• 4 batches a year with 30 companies per batch• Strong focus on marketing, design and fundraising• 200+ of the best mentors in Silicon Valley and beyond

General

What are accelerators looking for?

• A live product (MVP or more)• Some initial traction (although the more the better)

• Momentum in your metrics• Founders who are full-time focused• Core founding team is in place• Ability to articulate your business/metrics

You should have a few of these:

Funding Raising in Silicon Valley

Current Landscape for Valuations and Round Size

Pre Seed Stage$1.5M-$2M Valuation$100K Raised

Accelerator level with a working MVP and 3-6 months of user data

Seed Stage$3M-$8M Valuation$1M-$3M Raised

Series A$10M-$50M Valuation$5M-$10M Raised

Post accelerator stage with 30% MoM growth and $500K+ ARR revenue or thousands of users or MAU

Starting to scale and doing several million in revenue or six figure users/MAU

Hacks for Fundraising in the Valley

• Leverage the accelerators for validation• Leverage US advisors for validation• Get US customers/clients/users • Use AngelList• Have the right corp structure (Delaware C-Corp)

• Find brand name investors/advisors• Have a presence in the valley• Be confident, and sometimes arrogant

Funding Vehicles

Convertible Note• Debt Instrument (although that’s misleading)• Purchasing equity that converts when raising an equity round• Offers early investors a discount• Look at the 500 Startups KISS note or the YC SAFE note• Low legal overhead and reduced legal costs

Equity Priced Round• A lead investors sets the price (the valuation)• No discounts• Reserved usually for later stage investments (Series A)• High legal overhead and costs ($25K)

Failure is OK

Get in Contact

Email: sean@500.coTwitter: @percival and @500startupsIRL: Visit Mountain View, California

Q&A for 15 Minutes

Questions? Bring it.