Inside guide to vc funding
-
Upload
guest62cf84d -
Category
Technology
-
view
208 -
download
2
Transcript of Inside guide to vc funding
![Page 1: Inside guide to vc funding](https://reader034.fdocuments.us/reader034/viewer/2022051516/55a446ef1a28abfd2b8b47d5/html5/thumbnails/1.jpg)
Inside Guide to VC Funding
Peter Jones General Partner
But a techie really! CompSci, Cambridge; UNIX/C Programmer; wrote an RDBMS from scratch! (Why?); Founder/CTO of Metrica; CTO of SignalSoO; Strategy Director of AcQx; plus others that didn’t work so well!
![Page 2: Inside guide to vc funding](https://reader034.fdocuments.us/reader034/viewer/2022051516/55a446ef1a28abfd2b8b47d5/html5/thumbnails/2.jpg)
You have an advantage – VCs generally like techies!
![Page 3: Inside guide to vc funding](https://reader034.fdocuments.us/reader034/viewer/2022051516/55a446ef1a28abfd2b8b47d5/html5/thumbnails/3.jpg)
Be brutally honest with yourself – is this really a big opportunity?
Is it a global market?
Is the potenQal market size measured in $1bns?
Is it growing rapidly?
Inside Track VC Blockbuster Economics... £90m fund with goal of 4x; Return of £360m; 25 companies – 85% fail or low return, 15% succeed; Bulk of return from 4 companies 25% on exit, so need £1.4bn of exits; PotenQal £360m exit per company => Market must be big!
![Page 4: Inside guide to vc funding](https://reader034.fdocuments.us/reader034/viewer/2022051516/55a446ef1a28abfd2b8b47d5/html5/thumbnails/4.jpg)
Be brutally honest with yourself – do you have the ambiQon and is this the right Qme for you to do a startup?
Is your goal to create a big business and serious personal wealth?
You can’t create a lifestyle business with VC money
There are a lot easier ways to make a £1m!
Even with the best product, huge market, compelling business case, it’s a massive task...
... But can be incredibly intellectually, emoQonally and financially rewarding.
![Page 5: Inside guide to vc funding](https://reader034.fdocuments.us/reader034/viewer/2022051516/55a446ef1a28abfd2b8b47d5/html5/thumbnails/5.jpg)
Be brutally honest with yourself – stress test your idea really hard
Can you express the core of the proposiQon simply and concisely?
Is it solving a real problem where there is real pain?
Is it a must-‐have or just discreQonary for your users?
Are you really solving the problem and adding value?
![Page 6: Inside guide to vc funding](https://reader034.fdocuments.us/reader034/viewer/2022051516/55a446ef1a28abfd2b8b47d5/html5/thumbnails/6.jpg)
StaQsQcally the chances of raising VC money are low...
In the current climate it is probably harder!
You should assume that it will probably take six months to a year (or longer)
But you can improve your odds by working smart ...
Inside Track Typical Deal Flow Metrics
700 Plans/Decks
100+ MeeQngs
10 Serious
4 Deals
![Page 7: Inside guide to vc funding](https://reader034.fdocuments.us/reader034/viewer/2022051516/55a446ef1a28abfd2b8b47d5/html5/thumbnails/7.jpg)
Improving the odds – start building the team
The best thing you can do is build a kick-‐ass team around you
Ideally a balance of skills – technical, markeQng, bizdev
Ideally a team of peers – with equally aligned moQvaQons
Prior success (i.e. Making money for investors or yourself!) in a startup probably gets you through the first filter in one go!
Inside Track Bet on the horse or the jockey? Almost all VCs would choose the jockey – despite Harvard research!
![Page 8: Inside guide to vc funding](https://reader034.fdocuments.us/reader034/viewer/2022051516/55a446ef1a28abfd2b8b47d5/html5/thumbnails/8.jpg)
Improving the odds – genng the first meeQng
Inside Track VCs depend on their networks A warm introducQon from a trusted contact will probably get you a meeQng. “If X can’t find one person in my network and convince them why would I see them...”
DON’T PRESS THIS! (cat >/dev/null) SHOTGUN IS WEAPON OF LAST
RESORT
-‐ Meet porqolio companies -‐ Go to events like this -‐ Find Angel investors -‐ Consider an advisor
![Page 9: Inside guide to vc funding](https://reader034.fdocuments.us/reader034/viewer/2022051516/55a446ef1a28abfd2b8b47d5/html5/thumbnails/9.jpg)
Improving the odds – qualify the VC Always ask, “Am I wasWng
my Wme?”
1. Do they have any money?!
2. Do they invest in my stage of company?
3. Do they have a specific interest in my sector?
4. Have they invested in compeQQve businesses?
5. Can I get to the right person?
Source: Ben Holmes, Index, Slideshare.net
Inside Track Roles inside a typical VC – who you have to convince Associates – act as gatekeepers, source and qualify deals Partners – champion the deal, make the investment case, manage the investment subsequently, you need to like him/her Investment CommiZee/Partnership – formally agree the investment
![Page 10: Inside guide to vc funding](https://reader034.fdocuments.us/reader034/viewer/2022051516/55a446ef1a28abfd2b8b47d5/html5/thumbnails/10.jpg)
Improving the odds – developing the pitch/deck
Source: Dave McClure “How to pitch a VC”, Slideshare.net
-‐ You don’t need a 200 page business plan
-‐ A slide deck plus demo/video is ideal
-‐ Keep it simple and concise
-‐ Goal of meeQng #1 is to get meeQng #2
![Page 11: Inside guide to vc funding](https://reader034.fdocuments.us/reader034/viewer/2022051516/55a446ef1a28abfd2b8b47d5/html5/thumbnails/11.jpg)
Secret sauce – the importance of technology
• Technology is one of the key vectors of disrupQve innovaQon
• Today comes in lots of shapes and sizes – Scalability of a social media or web service – UX of a mobile app – Deep tech of a semanQc search
applicaQon • Pproprietary is good!
– At least for the secret sauce – Standards, open source for everything else
• VCs like technology because of the defensibility from compeQQon it brings – Its also something to sell if things don’t go
too well!
![Page 12: Inside guide to vc funding](https://reader034.fdocuments.us/reader034/viewer/2022051516/55a446ef1a28abfd2b8b47d5/html5/thumbnails/12.jpg)
Making progress on the business – execuQon is everything!
-‐ The importance of numbers -‐ Define key metrics (traffic,
retenQon, conversion) -‐ Track and show progress
-‐ The importance of evidence -‐ Find evidence for your market
size -‐ Find evidence of customers
desire to buy (ideally sell it!) -‐ Validity of business model
-‐ Develop proof points -‐ What do you need to show to
get to the next stage -‐ Tie proof points to funding and
business plan
“A good idea is just a mulQplier on the value of good execuQon”
Idea
Poor = -‐1 OK = 1
Good = 5 Great = 10
ExecuWon
Poor = $0 OK = $1m
Good = $10m Great = $100m
![Page 13: Inside guide to vc funding](https://reader034.fdocuments.us/reader034/viewer/2022051516/55a446ef1a28abfd2b8b47d5/html5/thumbnails/13.jpg)
So am I wasQng my Qme? -‐ Recognising a “slow no” is hard! -‐ Investors are always “interested” –
only valuable if they are doing work -‐ Don’t waste Qme trying to persuade
someone who said “no” (instead thank them – see #1 above)
-‐ Don’t take it personally!
-‐ Don’t drink your own kool aid! Constantly re-‐assess your proposiWon in light of criWcism
You can get there! Good teams with good ideas and execuQon will get funded