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Discussion: Early-Stage VC in 2015

Mike McCormick JFE Accelerator – 9/29/15

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Intro  -­‐  Mike  McCormick  •  Georgetown  University  –  Washington,  DC  •  Started  two  companies  in  college  •  Management  Consul>ng  •  Angel  Inves>ng  •  Business  Development  &  Ops  @  LiquidSpace  •  Georgetown  Angels  •  Rubicon  Venture  Capital  

@MikeMcCorms  -­‐-­‐  www.mccormick.vc  

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Intro  -­‐  Rubicon  Venture  Capital  •  SF  and  NYC  Offices  •  Joshua  Siegel,  Andrew  Romans  and  Mike  McCormick  •  Established  in  early  2014  •  Focused  on  Later-­‐Seed  and  Series  A  –  Non-­‐lead  investor  •  Opportunis>c  investments  across  tech  sectors  with  US-­‐focus  •  Focused  on  value-­‐add  (WHAT  A  CLICHÉ  RIGHT?!?!)  •  I  like  marketplaces,  dynamic  pricing  models,  fin-­‐tech,  IoT,  SaaS,  etc  

@RubiconVC  -­‐-­‐  www.rubicon.vc    

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Today’s  Agenda  •  The  Current  State  of  Venture  Capital  

•  “Seed  is  the  new  Series  A”  and  “Angel  is  the  new  Seed”  

•  What’s  up  with  the  “Series  A  Crunch”?  

•  What  investors  look  for  at  each  stage  

•  How  to  raise  your  first  round  of  funding  

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“Seed  is  the  new  Series  A”  ???  

•  Series  A  used  to  mean  a  round  above  $500k  or  possibly  $1m  

•  Now  you  see  $4m  seed  rounds  or  “Direct  to  A”  phenomenon  

•  “Angel”  or  “Pre-­‐Seed”  is  the  new  Seed  

•  Take-­‐away:  Don’t  worry  too  much  about  the  nomenclature.  Focus  on  what  amount  of  capital  you  need  to  raise  to  get  you  the  runway  and  resources  needed  to  reach  meaningful  milestones,  and  know  who  to  target  for  that  capital  at  that  stage.    

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The  “Series  A  Crunch”  

•  Recent  BIG  increase  in  number  of  seed  rounds,  but  only  modest  increase  in  amount  of  Series  A’s  

•  Only  the  best  seed  co’s  (about  30%,  perhaps  fewer)  will  raise  Series  A  –  Founders  oien  underes>mate  the  difficulty  of  raising  Series  A  

•  Recently  seed  investors  have  also  begun  to  pump  the  brakes  which  may  bring  valua>ons  back  down  to  earth.    

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What  Investors  Look  for  at  each  Stage  

•  Pre-­‐Seed  /  Angel:  Founders,  Vision,  Story  

•  Seed:  Founders,  Early  Trac>on,  Vision  

•  Series  A:  Product-­‐market  fit,  Proven  viability  of  growth  engines  and  unit  economics,  Ready  to  scale,  Founders,  Vision  

•  Series  B,  C,  D,  etc…:  Numbers,  Growth,  Billion-­‐dollar  poten>al  

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How  to  raise  your  first  round  of  funding  

•  Target  angels  

•  Work  your  network!  

•  Tell  a  great  story  

•  Give  them  something  to  latch  on  to.  Your  first  backers  will  invest  because  they  like  you  and  believe  in  your  vision.    

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Thank You!

@MikeMcCorms – www.mccormick.vc

JFE Accelerator – 9/29/15