The road may hold some surprises – reality has potholes.
When driving, brick walls don’t suddenly appear and cause an accident.
They do when you’re trying to raise money.
Venture Capital is different, tends to be very specialized and focused on geography. And finding the right investor is a big challenge.
Vc’s always look for companies are having a local presence and a team of people.
They invest based on giving you enough money to lower the risk of the business, to achieve meaningful milestones and build value in the company.
VC’s avoid casual conversation. They just want to hear something interesting in minimum words.
Investors always look for…
- Contact information on your presentation
- A compelling story-simple, straightforward, compelling, beginning middle and end
- Low or manageable risk
- Business Model: Technology, products matter but most importantly business
- Market Validation: Must have some level of revenue and traction in the marketplace
- Team: The quality of your team matters a lot. Your company and people around your company.
- Credibility / Trust: Show them that you are the one.
- Time: starting of a business, scaling of your business and product innovation.
- Investors like Momentum: Connect, Network and establish a relationship. Avoid references.
- Pattern: Show what you have got and how you are different from others or from your past failures. Be cautious. VC’s identify patterns.
- Milestones: Building value and a measurable ROI.
- Build Value: Your Milestones and Product Development will help you to gain the investment at a higher value later as you have lowered the risk.
- Full-time job: Most companies take between 6 to 18 months, and you may be called 100 times to raise money. So take out enough time.
140 words, One slide pitch deck, Business Model Canvas, a 10-12 pages Presentations and Delivery.
140 words: to gain the attention
One Slide Pitch Deck: to learn the gained attention
10-12 slides Presentation: to convert the gained attention into some serious talk and this is core to your profile.
Delivery: Your presentation skills, your communication, and your goal must be presentable.
Details to be incorporated in the 10 pages slides.
1) Problem: Why and who will pay for your product?
2) Solution: Easily, clearly and concisely solution
3) Market: Who and where is your market and how big it is?
4) Distribution and support: Online or offline, through a franchise. How will you sell your product?
5) Business Model: How to make money?
6) Competitor Analysis: Who are your competitors or your opportunities? Your value proposition vs marketplace.
7) Startup Team: Quality team at the development stage has more chances to get noticed and to raise money. Professional Portfolio and At least 2 full-time and 2 advisers.
8 ) Milestones: Internal and External achievements. Fund statements.
9) Key Financials: 3 – 5 years key assumptions, budget spread across R & D, Sales, Distributions and etc.
10) Term Sheet: Find a consultant:
- A) Money In-
– How much $
– How much stock
– Minimum and Maximum and Milestones.
2. B) Rights –
– Liquidation, Voting, Registration and pro-rata participation
3. C) Restrictions –
– Founder Vesting
– Additional stock issuance
– Company Sale
– Technology Sale
VC’s will exercise control to maximize the money they make in the company. Try to get or gather the perfect information to make decisions based on facts and gut power.
1) It’s about the business, not just product or tech
2) It’s a full-time job. You need time and time.
3) Know your investors
4) Know your Milestones
5) Know your user
6) Find the points of leverage
7) Connect, Network and Establish
8 ) 3 Rules of raising money
1) Don’t lie
2) Don’t run out of money
3) Don’t forget rule 1 and 2
9) 80/20 Rule: If it’s about the product, then 80% product and 20% business, or if it’s about business then 80% business and 20% about the product.
10) Learn and Practice
“Keep Walking” and when an opportunity comes “Just Do It”.
Stay fit and healthy…
Best of luck