glosho'14: investment bootcamp - erik steeb
TRANSCRIPT
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DEVELOPING AN INVESTMENT STRATEGY
Erik SteebVP Programs LACI & Director LACI@CSUN
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Funding Strategies
Setting Expectations
Growth Strategy, Major Milestones & Exits
Segmenting Rounds & Aligning Sources of Capital
How Much to Raise
Funding Resources
Structures
½%: Preparing for the Raise
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Setting Expectations
7½ %Startup
F&F and Hires
Founders
F&F
Options
Seed Round
Founders
F&F
Options
Angels
Series A
Founders
F&F
Options
Angels
VC-A
Series B
Founders
F&F
Options
Angels
VC-A
VC-B
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While we’re on percentages...
Be in that ½%: Get your shit together first!– Problem being solved
– Market opportunity
– Competition / Uniqueness
– First customers and why
– Team to get it done
– Stages of the Business
– Funding and Time of each
– How you’ll make money
– How (and when) they’ll make money
½ %
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Growth, Funding & Exits• Major milestones?
• Time to each one?
• Resources required?
• Funding for each phase?
• Where is the exit?
Valuation
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Funding Strategies
Proof of Concept Business Model CEO / Exec Team Pilot
Demonstration
Beta First Customer Distribution
Agreements
Manufacturing
Scale
Valuation
SBIR/STTR
Self / F&F Seed
Series A
Series B
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Proof of Concept Business Model CEO / Exec Team Pilot
Demonstration
Beta First Customer Distribution
Agreements
Manufacturing
Scale
Valuation
SBIR/STTR
Self / F&F Seed
Series A
Series B
Funding Strategies
• As much as needed to get to next major milestone
• Add 6 months buffer to allow for raise process
• Raise around major valuation bumps
• Consider receiving in tranches
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Proof of Concept Business Model CEO / Exec Team Pilot
Demonstration
Beta First Customer Distribution
Agreements
Manufacturing
Scale
Valuation
SBIR/STTR
Self / F&F Seed
Series A
Series B
From Whom?Non-dilutive options
• Grants, foundations, licenses, pre-orders, revenue– These should not be distractions!
Dilutive
• Convertible Notes
• Equity
Resources
• i3, CapIQ, LinkedIn, Local Angel Networks, Customers!
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Why do Investors Invest?– Coolness Factor– Disruptive Technologies– Disintermediate the Market– Bet on the Jockey– Great Team– 5x Return in 3 years
Remember, they bet on ½%... They fall in Love!
– Have your shit together!– Be Ready to Kiss a lot of frogs.– Make them Fall in Love...
