things startups need to know if they want to raise capital from silicon valley
Post on 21-Apr-2017
13.005 Views
Preview:
TRANSCRIPT
What you need to know if you want to raise capital from Silicon Valley
Jeff Clavier Founder & Managing Partner
Kima Ventures Portfolio Day Dec 9, 2013 – Paris, France
SoftTech VC in a Nutshell § Founded in 2004, SoftTech VC has backed 143 seed
stage startups in consumer internet, devices and Saas § Geographies:
§ 80% of the portfolio is in Silicon Valley, 10% is in New-York, the rest is in SoCal, Boulder and Toronto/Waterloo
§ To date: § 30+ companies have generated $1.5B in total exit
consideration § 70+ companies have raised $1.5B in follow-on financing § Top quartile performer in all funds
SoftTech is very much a startup – it just happens to operate in the VC market. It was bootstrapped for 3 years (Fund I) – and then scaled by raising $155M (Fund II, III, IV). And yes, it had zero chance of being a success.
12/14/13 about.me/jeff 2
Jeff Clavier
Charles Hudson
Stephanie Palmeri
A few SoftTech Exits
12/14/13 about.me/jeff
Acquired by Acquired by Acquired by
July 10 May 10 Dec 09
Acquired by
Apr 13
Acquired by
Dec 10
3
Acquired by
Oct 11
Acquired by
Feb 12
Acquired by
Jul 12
Acquired by
Aug 12
Acquired by
Aug 12
Acquired by
Jul12
Acquired by Acquired by Acquired by Acquired by Acquired by Acquired by
Dec 05 Aug 06 Dec 06 Aug 07 Aug 07 Dec 09
Acquired by
July 10
If you remember ONE thing from this talk
“The only real mistake is not trying, anything else is part of an entrepreneur’s journey”
12/14/13 about.me/jeff 4
Here Is the SV/NY Funding Ecosystem
Pre-Seed < $500K
• Bootstrapping/Friends and family/Crowdfunding • Incubators and Accelerators (YC, Techstars, AngelPad, SeedCamp)
Seed $1.2 to $2.5M
• Syndicates of micro-VC firms, angels and (potentially) traditional VCs • AngelList and Crowdfunding services as alternative or “fill up” opportunity
Series A $4M tp $10M
• One traditional VC, with micro VCs investing pro-rata and adding strategic angels • Family Offices, Strategics, Micro-VCs + Crowdfunding pools as alternative
Series B $6M to $15M
• Another traditional VC (or two), with insiders coming in for pro-rata • Same mix as Series A for alternatives
Growth $20M+
• Mix of traditional/growth VCs, PE firms, hedge funds. In parallel, secondary transactions. • Alternative: direct co-investments from LPs, hedge/mutual funds, cash rich corporates
5 12/14/13 about.me/jeff
Challenges to Raising Capital in the US
§ Visas for Founders and Executives
§ Financeable Idea: Big, Bold, Global Vision
§ Limited/Inexistent Network for employees and investors referral
§ Team/Product Credibility vs. Traction
12/14/13 about.me/jeff 6
Two Practical Ways To Get To The Valley
As an Employee § Get a large US co to sponsor
your visa and move you § Network your way into the
local community of entrepreneurs and investors
§ After 2 to 4 years, you’re local and you can figure out your way into a new visa, startup, funding, etc.
§ Takes time, but works well if you are committed to the US
As an Entrepreneur § Raise seed financing in
France/Europe for a global product, validated locally
§ Raise a Series A/B in Europe with a global footprint target
§ Raise a Series B/C in the US to expand/grow
§ If your startup has 2+ years, transfer visas (L) is a possibility
12/14/13 about.me/jeff 7
What Silicon Valley Investors Consider
§ Market Opportunity
§ Vision
§ Team/Bench
§ Traction
§ Competition
§ Distribution
§ Marketing
§ Monetization
§ Economics
12/14/13 about.me/jeff 8
What Silicon Valley Investors Consider
§ Market Opportunity § Huge ($Bs)
§ Vision § Big, Ballsy, Impactful
§ Team/Bench § World class/Experienced
§ Traction § Proof that the shit works
§ Competition § Know your ecosystem
§ Distribution § Most critical
§ Marketing § What’s unique about yours
§ Monetization § What brings the dough
when
§ Economics § Do the CAC vs. LTV maths
work
12/14/13 about.me/jeff 9
Big No-‐No’s
§ Expecting we’ll move you § Most investors will want to
see commitment to US
§ Traction in France is enough to get US funding § Need global ambition and
European traction
§ Assume every VC is a potential investor § Previous European deal is
a strong indicator
§ Expecting that it’s easy § Convincing US investors
is unbelievably hard § Research how it worked
for SoundCloud, Klarna, Unity, Criteo, Songkick, Skype, Rovio, etc.
§ A detail: the Exit slide in the deck § We’ll show you the exit…
door
12/14/13 about.me/jeff 10
Finally a Few Recommendations
§ You need to understand the “right” source and amount of funding for your startup § Based on the vision and market opportunity § Depending on your stage, and industry
§ Crunchbase and AngelList are great sources of information re who funded what
§ Remember: most professional investors will only consider opportunities coming through a referral § Other successful European entrepreneurs are probably best
§ Incubators offer a real opportunity to get early stage financing in the US
12/14/13 about.me/jeff 11
Any Questions?
top related