So you want to raise capital
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17-Oct-2014 -
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Transcript of So you want to raise capital
So you want capital for your startup or small business, eh?
Aghhahaha…sucka..
Startups are hard.
Startups are really hard.
Startups are heartbreaking.
Startups are soul crushing.
Startups are life shortening.
fact:this is not reality.
funding myths about startups and small businesses
1. Startups cost nothing to build2. Startups get funded on a napkin 3. A good idea wins every time
myth #1: startups are cheap to build
reality:lean or not, it costs money to build
something significant.savings do run out.
stuff that cost MONEY
• Hiring amazing people – and you need A level amazing people in startups (they like to be paid even if they believe in you)
• Infrastructure – yes. It’s cheaper than it was, but those EC2 bills still pull from your bank
• Marketing – you can do a lot of social media for free in the beginning, but there is a bunch of noise to weed through today
• Funding – yes. It cost money to make money, it takes your time and cost you money to meet with the right people that will fund your business.
as if you didn’t know this
fact:4 out of 5 people who use the phrase “it’s
cheap to build a startup” have never built a startup (and probably never will)… the remainder are independently wealthy
how to pitch:
1. Know that you will be rejected2. You will underestimate the number of times
you will be rejected and how long it will take you to raise $.
3. Ask rejecters for feedback (Real feedback)4. Ignore most of said feedback*5. Seek mentors and allies (note: most
important point of this entire presentation)* Knowing what to ignore is not easy
fact: A Venture Capitalist looks at 2000 deals a year.
fact: A Venture Capitalist looks at 2000 deals a year.
A Venture Capitalist Reads the first two paragraphs of the executive summary and reviews the financials (Aka
EBITDA)
Fact: A Venture Capitalist looks at 2000 deals a year.
A Venture Capitalist Reads the first two paragraphs of the executive summary and reviews the
financials (Aka EBITDA)The ones that fit - get set a side- the rest are
thrown into a pile, never to be looked at again.
fact: A Venture Capitalist looks at 2000 deals a year.
A Venture Capitalist Reads the first two paragraphs of the executive summary and reviews the
financials (Aka EBITDA)The ones that fit - get set a side - the rest are
thrown into a pile, never to be looked at again. 50 receive Due diligence: < 10 are invested in
fact: A Venture Capitalist looks at 2000 deals a year.
A Venture Capitalist Reads the first two paragraphs of the executive summary and reviews the
financials (Aka EBITDA)The ones that fit - get set a side - the rest are
thrown into a pile, never to be looked at again. 50 receive Due diligence: < 10 are invested in
“Many quality deals…but we’re not going to do them. They’re just not ‘Right’ for us”
common VC rejections
• “we think you are too early for us”• “we have too many deals in our pipeline”• “we don’t understand the market”• “we’d like to see some local investment”• “you’re raising too much”• “you’re raising too little”• “if only you did a + b, we’d be a better fit…
“We’re just not that into you”
conviction
more funding ideas
• Friends & Family: your network is stronger than you know. (We are doing this now)
• Hold a fundraiser: make it awesome. (We are combining this with F&F)
• Sell your stuff on eBay: It’s a short term sacrifice.• Make money in your free time: Mowing lawns?
Delivering pizza?• Hire a Grant Application specialist: they often
work off of commission and there are small biz grants
myth #2: Startups are funded on a napkin
reality:Angels and VC’s: 15-40+ Page Business Plan
Regulation A: 35-60+ Page Business PlanRegulation D: 35-60+ Page Business PlanCrowdfunding: 4-40+ Page Business Plan
myth #3:
A good idea wins every time
slightly closer to the truthA good idea, good execution, good timing,
perseverance and relentless sickening work ethic will win.
reality:
Startups and small business owners, run businesses (duh)
reality:
Startups and small business owners, run businesses (duh)
Funding is limited by network: Unlikely to connect with appropriate advisors and investors
reality:
Startups and small business owners, run businesses (duh)
Funding is limited by network: Unlikely to connect with appropriate advisors and investors
Raising Funds: Uncertainty of time, outcome, and expense
fact:It takes 3 months to file or prepare for fund
raising
fact:It takes 3 months to file or prepare for fund
raisingFund raising can take 6 months to 2 years for
ONE round
There is nothing Fair about being an entrepreneur
fact: YOU build the future.
“The best way to predict the future is to invent it.” –Alan Kay
Fact:Entrepreneurs are CRAZY
Because without us crazy, delusional people who do this the world would be a boring,
stagnant place.
Both brilliant and both contributed so much to science
Tesla died broke Edison died rich
What of those with better ideas who lacked the resources and
weren’t heard at all?
what we need to change
1. Encourage/educate more entrepreneurs and family & friends on how to invest in startups
2. Think Tanks (BCI TT coming soon). Work together (Globally). Create Communities (Crowdfunding!)
3. Create better entrepreneurial programs for Universities
4. Host more events: showcasing startups, providing education, and to find investors
Bridge Capital InvestmentsWe are here to help
We are passionate entrepreneurs that know how to provide the foundation (a community,
capital and business development tools) to build successful companies from the ground up
Reach out to us: [email protected]@bridgecapitalinvestments.com