Tech entrepreneur Ryan Allis shares how to raise venture capital for your startup and how to keep costs low and bootstrap in the beginning. This prese...
Tech entrepreneur Ryan Allis shares how to raise venture capital for your startup and how to keep costs low and bootstrap in the beginning. This presentation is part of The Startup Guide: Building ...Full description
Descripción: Tech entrepreneur Ryan Allis shares how to raise venture capital for your startup and how to keep costs low and bootstrap in the beginning. This presentation is part of The Startup Guide: Building ...
Venture Capital
Entrepreneur Ryan Allis presents the Networks section of The Startup Guide: Building a Better World Through Entrepreneurship. This section covers how to surround yourself with high quality p…Full description
Full description
Vault Career Guide to Venture Capital
Introduction
Powerpoint presentation given by Mike Maples Jr from Floodgate Capital.Full description
Report on Initial Coin Offerings and the impact to crowdfunding and Venture capital. October 2017 by Mangrove Capital Partners
A case of how govt. regulations in india, beat venture financing
Tiny House - Raising GuideFull description
it gives overview about the private placement and venture capital.
List of Venture Capitalists
manga studio start up guideFull description
Description complète
Full description
OTL Startup GuideDescription complète
Full description
Tech entrepreneur Ryan Allis shares how to create a basic lightweight business plan that can help clarify what problem you're solving and what you're creating before you build it. This prese…Description complète
Entrepreneur Ryan Allis presents section one of The Startup Guide: Building a Better World Through Entrepreneurship. This section covers goals, vision boards, and bucket lists. Find more onl…Full description
Entrepreneur Ryan Allis presents section two of The Startup Guide: Building a Better World Through Entrepreneurship. This section covers a list of values to live life with as you go about bu…Full description
Tech entrepreneur Ryan Allis shares how to create a basic lightweight business plan that can help clarify what problem you're solving and what you're creating before you build it. This prese…Descripción completa
The
2013 Edition
Building a Better World Through Entrepreneurship
With Ellen Daly
ENTREPRENEURSHIP
RAISing VENTURE CAPITAL
ENTREPRENEURSHIP
RAISing VENTURE CAPITAL
ABOUT THIS PRESENTATION
THIS presentation IS PART OF A LARGER slide DECK on building a better world through entrepreneurship en trepreneurship
For more slides & CONTENT visit:
Startupguide.com
entrepreneurship
Raise funding or bootstrap
YOU HAVE TO DO WHATEVER IT TAKES TO KEEP COSTS LOW UNTIL YOU HAVE REVENUE
entrepreneurship
Raise funding or bootstrap
THE #1 mistake I see First time entrepreneurs Make is raising too much MONEY TOO SOON
entrepreneurship
Raise funding or bootstrap
Don’t raise outside CAPITAL UNTIL AFTER YOU KNOW YOU HAVE SOMETHING THAT CUSTOMERS ARE WILLING TO PAY FOR
entrepreneurship
Raise funding or bootstrap
TO TEST DEMAND BEFORE YOU RAISE MONEY BUILD AN INEXPENSIVE PROTOTYPE and improve it UNTIL YOU KNOW CUSTOMERS LOVE IT
entrepreneurship
Raise funding or bootstrap
Unless you’re building a product Like a new drug that requires massive upfront investments don’t raise Outside capital until after You have proven customer demand
entrepreneurship
Raise funding or bootstrap
IF YOU RAISE MONEY TOO SOON AND Don’T YET HAVE SOMETHING CUSTOMERS WANT INVESTORS WILL EAT YOU FOR BREAKFAST
entrepreneurship
Raise funding or bootstrap
YOUR GOAL IS FOR EVERYONE TO DO WELL--CUSTOMERS, EMPLOYEES, INVESTORS & YOU SO Don’T PLAY WITH INVESTOR MONEY UNTIL YOU KNOW YOU HAVE SOMETHING THAT THE MARKET REALLY WANTS
entrepreneurship
Raise funding or bootstrap
PRO TIP: GET AS FAR AS YOU CAN WITHOUT RAISING OUTSIDE CAPITAL
entrepreneurship
Raise funding or bootstrap
AT ICONTACT WE BOOTSTRAPPED
FOR THE FIRST 3 years (2003-2006)
entrepreneurship
Raise funding or bootstrap
WE GOT to $1.5 million in annual sales BEFORE WE RAISED ANY FUNDS BEYOND A $5,000 loan
entrepreneurship
Raise funding or bootstrap
HOW? BY KEEPING COSTS LOW UNTIL WE GOT REVENUES NOT TAKING SALARIES FOR 3 years AND DOING SERVICE WORK ON THE SIDE FOR FUNDS TO LIVE OFF OF
entrepreneurship
Raise funding or bootstrap
We LIVED IN THE OFFICE ATE RAMEN NOoDLES
AND Jumped IN DUMPSTERS TO RECOVER PROOF OF PURCHASE TAGS FOR REBATES
entrepreneurship
Raise funding or bootstrap
IN THE BEGINNING DO WHATEVER IT TAKES
TO KEEP COSTS LOW
entrepreneurship
Raise funding or bootstrap
RYAN’s 3 RULEs OF BUSINESS: 1. 2. 3.
CREATE PRODUCTS CUSTOMERS LOVE RECRUIT TRULY EXCELLENT PEOPLE Don’t raise venture capital until you have revenue & PROVEN CUSTOMER DEMAND
entrepreneurship
Raise funding or bootstrap
TOO MANY STARTUPS FAIL BECAUSE THEY RAISE VENTURE CAPITAL BEFORE THEY HAVE REVENUE AND BEFORE THE ENTREPRENEUR HAS BUILT SOMETHING CUSTOMERS LOVE
entrepreneurship
Raise funding or bootstrap
THE ABSOLUTE BEST SOURCE OF FUNDING IS FROM
PAYING CUSTOMERS
entrepreneurship
Raise funding or bootstrap
Venture capital is LIKE THE GOLDEN MUSHROOM IN MARIO KART IT MAKES YOU GO FASTER BUT If you accelerate TOO QUICKLY IN THE WRONG DIRECTIon
YOU FALL OFF A CLIFF
entrepreneurship
Raise funding
JUST BECAUSE MONEY IS AVAILABLE DOESn’t MEAN it’s good for you OR that your company is ready
entrepreneurship
Raise funding OR BOOTSTRAP
OUTSIDE CAPITAL SHOULD BE USED AS FUEL TO ACCELERATE WHEN YOU’RE ALREADY MOVING IN THE RIGHT DIRECTION
entrepreneurship
Raise funding or bootstrap
WHERE TO LOOK DEPENDS ON HOW MUCH YOU NEED AND HOW FAR ALONG YOU ARE
entrepreneurship
Raise funding or bootstrap
HERE’s a chart of THE DIFFERENT TYPES OF MONEY BY STAGE SIDE JOBS
Yes
CREDIT CARDS
YES
Yes if PRUDENT
YOUR SAVINGS
Yes
Yes if available
Friends & Family
Yes
Yes if available
Yes
KICKSTARTER/Fundable
Yes
YES
YEs
BANKS
Yes
YES
Angel investors
YES
YES
SUPER ANGELS
YES
YES
SEED STAGE VC
YES
YES
Growth StAGE VC
YES
YES
Mezzanine debt
YES
YES
LATE Stage VC
YES
YES
PRIVATE EQUITY
YES
YES
PUBLIC MARKETS
YES
PIPES
YES
CORPORATE BONDS
YES
entrepreneurship
Raise funding or bootstrap
A great source to find early Stage angels is
AngelList.com
entrepreneurship
Raise funding or bootstrap
ALSO CHECK OUT THE NEW Peer-to-peer investing sites That have launched FOLLOWING the PASSING OF THE U.S. JOBS ACT of 2012 THE BEST ONE I’VE SEEN Is
FUNDABLE.com
entrepreneurship
Raise funding or bootstrap
OTHER BUSINESSES LIKE DALTON CALDWELL’s APP.NET HAVE BUILT KICKSTARTER-LIKE PLATFORMS OF THEIR OWN TO FUND THEIR EARLY EXPENSES
entrepreneurship
Raise funding or bootstrap
DO YOUR BEST TO AVOID RAISING MORE THAN 1x your current ANNUALIZED REVENUE
entrepreneurship
Raise funding or bootstrap
AS AN EXAMPLE, HERE iS Icontact’s CAPITAL RAISED OVER 4 financing rounds June 2003
$5k
$5k
FRIEND
LOAN
0%
May 2006
$500k
$1.5M
IDEA FUND
SEED STAGE
$16m
$16.5M
3%
June 2007
$5.3M
$5.5M
Updata
SERIES A
$27M
$32.3M
16%
August 2010
$25M
$38M
JMI EQUITY
SERIES B
$100M
$125M
20%
NOTE THAT OUR ANNUAL REVENUE WAS ALWAYS HIGHER THAN THE AMOUNT OF MONEY WE RAISED
entrepreneurship
Raise funding or bootstrap
YOUR NEGOTIATING POWER is BASED ON LEVEL OF NEED FOR THE MONEY YOUR EXPERIENCE YOUR TEAM PRODUCT & TECHnOLOGY COMPETITION OTHER TERM SHEETS QUALITY OF YOUR ADVISORS
entrepreneurship
Raise funding or bootstrap
THE MOST IMPORTANT INVESTMENT TERMS VALUATION OPTION POOL SIZE LIQUIDATION PREFERENCES FOUNDER REVESTING PREFERRED VETO RIGHTS TYPE OF PREFERRED STOCK BOARD SEATS
! THE HIGHEST VALUATION Isn’T ALWAYS BEST
entrepreneurship
Raise funding or bootstrap
FACTORS IN SELECTING YOUR INVESTORS CHEMISTRY WITH THE PARTNER OPERATIONAL EXPERIENCE CURRENT PORTFOLIO ALIGNMENT PARTNER/FIRM EXIT RESULTS EXECUTIVE RECRUITING ABILITY TERMS OF INVESTMENT
entrepreneurship
Raise funding or bootstrap
TECH STARTUP PRE-REVENUE VALUATION GUIDELINES VALUATION RANGES FROM $1M To $25M depending on Factors like •
CEO Past exits
•
TEAM EXPERIENCE
•
NUMBER OF USERS
•
NUMBER OF ENGINEERS
•
LOCATION OF COMPANY
entrepreneurship
Raise funding or bootstrap
PRE-REVENUE VALUATION EXAMPLE INCORPORATED b2c tech COMPANY RUN BY FIRST TIME ENTREPRENEUR with 1 engineer
Pre-Money Valuation: $1m-$3m
entrepreneurship
Raise funding or bootstrap
PRE-REVENUE VALUATION EXAMPLE INCORPORATED b2c tech COMPANY RUN BY FIRST TIME ENTREPRENEURS who have been through y combinator with a good idea AND 2 engineers
Pre-Money Valuation: $4m-8m
entrepreneurship
Raise funding or bootstrap
PRE-REVENUE VALUATION EXAMPLE tech COMPANY run By experienced CEO with 10 years c-level experience, $100m prior Exit, & 5 engineers
Pre-Money Valuation: $10m-20m
entrepreneurship
Raise funding or bootstrap
TECH POST-REVENUE VALUATION GUIDELINES 1x to 12x revenue based on factors like • • • • • • •
AMOUNT OF REVENUE REVENUE GROWTH RATE NUMBER OF USERs/customers TYPE OF REVENUE CEO/TEAM EXPERIENCE COMPANY MARKET LOCATION OF COMPANY
entrepreneurship
Raise funding or bootstrap
AS YOU GO ABOUT FUNDRAISING YOU USUALLY WANT TO CREATE A COMPETITIVE PROCESS
entrepreneurship
Raise funding or bootstrap
BUILD YOUR FUNDING PROCESS TO ENSURE YOU RECEIVE
MULTIPLE TERM SHEETS
entrepreneurship
Raise funding or bootstrap
HAVE ACCESSIBLE IN YOUR HEAD VALUATION COMPARABLES • •
•
RECENT SIMILAR Venture Deals Recent SIMILAR M&A deals Public comparables
entrepreneurship
Raise funding or bootstrap
RAISE MONEY ONLY FROM SMART PEOPLE YOU REALLY LIKE You’LL BE MARRIED to Them FOR THE NEXT 3-10 years
entrepreneurship
Raise funding or bootstrap
WAIT TO RAISE Your series A UNTIL You HAVE PROVEN MATHEMATICALLY THAT X DOLLARS SPENT BRINGS Y DOLLARS BACK And make sure y is >4 times x!