how to fund your startup venture
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How to fund your startupTRANSCRIPT
HOW TO FUND YOUR STARTUP
November 2013
RICARDO WEISZ
2
TYPES OF STARTUP FUNDING
1. Pre-seed
2. Angel/Seed
3. Series A
4. Follow-up rounds
Idea
F&F
Universities
Incubators
Accelerators
Pre-Seed Funds
Pre
-see
d
Death Valley
Land of Zombies A
nge
l / S
eed
Angel Funds
Pledge Funds
Family Offc.
Seri
es A
Business Plan
MVP
Commercial Launch
Cash Flow +
Proven Product
Proven Market
Paying Customers
Alpha / Beta Proof of Concept
VC
$25K $250K $500K+ $3MM 4
Idea
Venture Hive
The LAB Miami
MEC261
Pipeline
Launchpad P
re-s
eed
MIF
AGP
Accredited Wealthy Investors
An
gel/
see
d
NWA
Gold Coast Venture Forum
AGP
Tamiami
Seri
es A
Business Plan
MVP
Commercial Launch
Cash Flow +
Proven Product
Proven Market
Alpha / Beta Proof of Concept
Florida Growth Fund
HIG Inflexion Antares
$25K $250K $500K+ $3MM 5
THE US VENTURE CAPITAL WORLD
6
US Based VC Funds 2,700
US Based family offices 3,000
US based organized Angel groups 450
US accredited investors 15,000
SE High net-worth individuals 8,000
US Ultra high net-worth individuals ($1BB+) 600
US public pension funds 600
LANDSCAPE
2012 Stats Deal
Count Total $
Invested ($M) Median Deal
Size ($M)
Angel/Seed 814 $793M $0.85
VC 1,529 $8,950 $3.5
South East is least active region with less than 15% of all deals
Source: 2013 Annual Venture Rundown by Pitchbook
CRITERIA
• Management • Business plan • Compelling technology, product,
service or market position • Sustainable differentiation • Addressable market size • Investment structure and clear
path to profitability
8
DOCUMENTS REQUIRED TO RAISE FUNDS
• Executive summary
• Investment deck
• Detailed financials
• Pitch deck
9
FUNDRAISING PROCESS
• It’s about how company will look with investment
• Start with good management; that’s what people invest in
• Fundraising is a slow process
10
WHERE DO I START?
• Documents ready
• Gust
• Startup conferences
• Pitch accelerators
• Network
11
VALUATION METHODS
• Discounted net present value
• Comparables
• Historical
• Startup market
12
VALUATION COMMENTS
• Don’t be greedy
• Be realistic
• Geography is influential
• Personal history
• Career of startups
13
WHEN SPEAKING WITH INVESTORS
• Invested in your stage and/or industry in the past 12 months?
• References? • Public Record of Transactions?
Check Form D Filings
14
FACTS
• < 5% Investor pitches are investor ready
• Average VC reviews 100 per month • An analyst reviews • 5% Pass screening each month • Principals review those which pass • All funds have scoring mechanisms
and criteria
15
ACTUAL PROCESS
• Don’t shop the company until
you’re comfortable you’ll make it
through screening
• 20 to 40 hours a week
• 3 to 6 months to finalize TS and receive money
• 50-75 pitch presentations
16
COMMENTARY
• Crowdfunding
• Kickstarter
• Earlyshares
• Convertible debt
• Fundraising never stops
• Geography / Season
17
USEFUL LINKS
• http://www.nvca.org/
• https://www.pwcmoneytree.com/
• https://www.gust.com/
• http://www.angelcapitalassociation.org/
• http://www.cbinsights.com/
• https://angel.co/
• http://s.co
• http://www.edc-tech.org
18
SOFLA ACCELERATORS
• VentureHive.co
• LabMiami.org
• MEC261.com
• EDC-Tech.org
19
SUMMARY
• Do your homework
• Compelling story
• It takes time
20
