Lean and Venture

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<ol><li> 1. Lean and VentureDavid BinettiLean Startup Circle19 June 2013Thursday, June 20, 13 </li><li> 2. @dbinettiAbout Me Most recently, Votizen (acq. Jan 2013) Longtime contributor to Lean movement Raised equity for ve startupsThursday, June 20, 13 </li><li> 3. @dbinettiWhen Raising Money, One Word:TractionXThursday, June 20, 13 </li><li> 4. @dbinettiWhen Raising Money, One Word:LeverageThursday, June 20, 13 </li><li> 5. @dbinettiLeverage Financings are just deals. Seed deals, Series A/B/C Deals, LoanDeals, Acquisition/IPO Deals. The most important factor in any dealis leverage. VCs generally start from a position ofhigh leverage; your goal must be toshift that balance.Thursday, June 20, 13 </li><li> 6. @dbinettiLeverage What is leverage? Ability to inuence the terms of a deal Leverage Factors Necessity Desire Competition TimeThursday, June 20, 13 </li><li> 7. @dbinettiNecessity Generally weak starting position. You need money, but they dont needto give it to you. Increase by: Not needing (bootstrap/cash ow). Market timing. Being young! (Gee, thanks.)Thursday, June 20, 13 </li><li> 8. @dbinettiDesire Neutral to good starting position. VCs fall in love with shiny objects (as do we all) Increase by: Anchor Investor Buzz Team/technology/other unique asset The usual: traction, scale, market, traction,revenue, traction, partnerships, patents,traction, product, traction and traction.Thursday, June 20, 13 </li><li> 9. @dbinettiCompetition You have the most control here. Venture is a very small, close-knit market. Facts are scarce; opinions are generallythe only real information. Missed opportunities are remembered. Increase by: Sequence your pitches closely together. Show momentum, but never name names.Thursday, June 20, 13 </li><li> 10. @dbinettiTime Critical, and rarely on your side. Works against desire Increase by: If youre on a clock, extend it Speed iteration cycle time. When raising, start early.Thursday, June 20, 13 </li><li> 11. @dbinettiReal-world example: Votizen Bootstrapped (necessity) -&gt; Got good engagement (desire) -&gt; Anchor Investor (desire) -&gt; Brand name Co-Founder (desire) -&gt; 20 VCs in ten days (competition) -&gt; Upcoming election (competition) -&gt; In no rush (time) -&gt; ....Funding on great terms!Thursday, June 20, 13 </li><li> 12. @dbinettiLean Traps Lean can constrain thinking. Act lean,but dream big! Failure is failure. Tolerate it, dontcelebrate it. Dont be religious. Vanity metrics can beyour friend. Lean is not a deterministic path tosuccess.Thursday, June 20, 13 </li><li> 13. @dbinettiVC Speak GlossaryStatement TranslationWell fund this when you get more traction. NoWe think this is going somewhere but cant act now. We want to stay in touch. NoWe love the product but need to talk to the partnership. NoWe would love to continue the discussion; can you come back in two weeks? NoWe want to invest but cant nd room in our portfolio. NoHere is a signed term sheet. MaybeHello, this is SiliconValley Bank; the wire just came in. YesThursday, June 20, 13 </li><li> 14. @dbinettiFinal Advice Financings are a series of deals; thinkabout the second deal beforeconsidering the rst. Related: Once you raise, you loseleverage instantly. Be wary of seeddeals. Getting funding only proves you canraise money. Nothing more.Thursday, June 20, 13 </li><li> 15. @dbinettiFurther Reading Bargaining for Advantage, Richard Shell Recent post by Steve Blank Pitch Deck (David Cowan, Dave McClure) Venture Deals (Feld/Mendelson) Venture Hacks Cap Table App (ask me) Feedback Wanted!!!!Thursday, June 20, 13 </li><li> 16. Thank You!/QAThursday, June 20, 13 </li><li> 17. @dbinettiThursday, June 20, 13</li></ol>