[STARTUP GUIDE] How to get initial funding?
-
Upload
hatch-program -
Category
Investor Relations
-
view
1.990 -
download
0
Transcript of [STARTUP GUIDE] How to get initial funding?
Startup Guide:
HOW TO GETINITIAL FUNDING?
By Ph.D Hajime HottaChief Technology Officer Cinnamon (Singapore)
a publication of
HAJIME HOTTAExperienced entrepreneur from Japan
CTO at Cinnamon (Singapore)» Koala, selfie messenger
Ph. D in computer science at the age of 25» Got in total 350k grants for my research in AI x Web
Former Chief Architect at Cirius Technologies» The world’s first Location-based ad tech provider» Acquired by Yahoo! Japan
Former CTO at Naked Technology (Japan)» Technology to enable smooth UI on smartphone» Licensed to big enterprises (NTT Docomo, Dentsu, etc)» Software distributed to 10M+ users in Japan» Acquired by Mixi, largest social game provider
How to get Initial Funding? – Hajime Hotta
TWO TYPES OF BUSINESSES
How to get Initial Funding? – Hajime Hotta
SME Small-to-Middle
Enterprise
IDE Innovation-Driven
Enterprise
• Linear growth• Local• Bank/Family finance• Lots of experienced
people exist already
• Exponential growth• National/International• Equity Finance• Less experienced
entrepreneurs
IDE IS EXPECTED TO MAKE FAST GROWTH
How to get Initial Funding? – Hajime Hotta
SeedMoney
Series AMoneyPreparation
$200k~500k
$1.5M~5M
WHAT IS REQUIRED FOR EACH ROUND?
How to get Initial Funding? – Hajime Hotta
Series ASeed
Team
Biz Plan
Product
TractionMinimum for
Product ValidationEnough to see
exponential growth
Valuation $1.5M-2M $4M-$6M
MVP running Solid
Excellent Level Excellent Level
Excellent Level Excellent Level
WHAT IS REQUIRED FOR EACH ROUND?
How to get Initial Funding? – Hajime Hotta
Series ASeed
Team
Biz Plan
Product
TractionMinimum for
Product ValidationEnough to see
exponential growth
Valuation $1.5M-2M $4M-$6M
MVP running Solid
Excellent Level Excellent Level
Excellent Level Excellent LevelHOW TO MAKE IT?
OPTIONSHave a different profitable business (Outsource)» Unstable resource allocation
Weekend» Lose CEO’s attention to businesses
Personal debt from family and friends» Perfect in case you are in such a lucky situation
Pre-seed Round
How to get Initial Funding? – Hajime Hotta
DIFFERENCE BETWEEN PRE-SEED AND SEED
How to get Initial Funding? – Hajime Hotta
SeedMoney
Series AMoneyPre-Seed
$200k~500k
$1.5M~5M
$20k~50k
DIFFERENCE BETWEEN PRE-SEED AND SEED
How to get Initial Funding? – Hajime Hotta
Seed
ProfessionalInvestors
(Institutes)
ExperiencedEntrepreneursor Accelerators
Investor Profile
Put moneyto scale up
the business
Surely lead toIDE model
Goal of Investment
Pre-Seed
READINESS FOR “PRE-SEED” ROUND
How to get Initial Funding? – Hajime Hotta
Seed
Team
Biz Plan
Product
TractionMinimum for
Product Validation
Valuation $1.5M-2M
MVP running
Excellent Level
Excellent Level
Pre Seed
N/A
$300k-$800k
Proof ofExecution Ability
Market Detection
Excellent Level
QUESTIONS1. Is pre-seed round necessary?
Aren’t advisors enough?2. Who is the right investor on pre-seed round?3. How to reach out to angel investors?4. How to pull their commitment?
How to get Initial Funding? – Hajime Hotta
QUESTIONS
Is pre-seed round necessary? Aren’t just advisors enough?
How to get Initial Funding? – Hajime Hotta
ANSWER
Not necessaryif you are confident enough
as a perfect management team
How to get Initial Funding? – Hajime Hotta
DIFFERENCE BTW RIGHT ANGEL AND ADVISORY
How to get Initial Funding? – Hajime Hotta
ObserveStatus
Find CriticalProblems
FindSolution
Execution
Advisory’sValue Add
Investor’sValue Add
WHAT ARE TYPICAL HIDDEN RISKS?» Polishing the product which CANNOT convince investors
» Do exceeding debt financing and BS/PL look weird
» Hiring too much at the early stage
» Building core team with weird ownership structure / allocate too much ESOP
» Pitch with bad quality or and get declined by VC already (typically no response / keep me updated)
» Chosen bad seed investor (point of no return)
How to get Initial Funding? – Hajime Hotta
CHECK SHEET
How to get Initial Funding? – Hajime Hotta
SME
Background
Thought-type IDE
EntrepreneurFinancial
PessimisticOptimistic
Quick WinSight Long-term
Hands-onHelp Hands-off
Expectation-Type
MY RECOMMENDATION
How to get Initial Funding? – Hajime Hotta
SME
Background
Thought-type IDE
EntrepreneurFinancial
PessimisticOptimistic
Quick WinSight Long-term
Hands-onHelp Hands-off
Expectation-Type
+ Chemistry Match
WHERE ARE THE PRE-SEED INVESTORS?
How to get Initial Funding? – Hajime Hotta
Competition/Programs
AcceleratorsFriends’friends
Startup WeekendEchelon
HATCH! PROGRAMStartup Asia
etc.
JFDIFounder Institute
iAxiletc.
UseLinkedIn / Facebook
to post messages
They are not professional investors, therefore they don’t often say “I am investing”
WHERE ARE THE PRE-SEED INVESTORS?For those who seems to experience startup founders and make some successful stories:
Magic Words: Can we have a short meeting for the feedbacks to our product?
Ideas behind: Advisory type experienced entrepreneurs are very happy to see exciting idea and make feedbacks because they’ve made a lot of mistakes before.
How to get Initial Funding? – Hajime Hotta
READINESS FOR “PRE-SEED” ROUND
How to get Initial Funding? – Hajime Hotta
Seed
Team
Biz Plan
Product
TractionMinimum for
Product Validation
Valuation $1.5M-2M
MVP running
Excellent Level
Excellent Level
Pre Seed
N/A
$300k-$800k
Proof ofExecution Ability
Market Detection
Excellent Level
SHOW YOUR EXCELLENT TEAMSome of outstanding track record » Ph.D or Stanford/CMU/Harvard class univ grads» Serial Entrepreneur (key role, has to be successful)» Engineer, understanding business quite well» Manage to reach amazing numbers (acquire 1M users, 100 brands connections, etc)» Fluency in English» Winner in competition (Startup Weekend, etc)» Engineer worked for Google / Apple / Facebook» Get strong recommendation by successful people
+ The quality of current product is really nice(less bug, natural/professional UX)
How to get Initial Funding? – Hajime Hotta
Investors’ concerns:» The founders might break up» Might quit soon» Too confident» Less transparent» No value can be conveyed to
the team
Tell your own story to blow those concerns away:» How strongly-tied with your cofounders?
(single founder is not really nice)» The history to show the will» Show the strength and weakness
honestly along with your one successful experience
SHOW YOUR EXCELLENT TEAM
How to get Initial Funding? – Hajime Hotta
MARKET DETECTIONThe markets are already set in investors’ mind
How to get Initial Funding? – Hajime Hotta
Commerce
MobileGame
Uberification
Edu-Tech
Payment
O2O
FinanceTech
IoT SaaS
Crowdsource
Big Data/Analytics
Ad-Tech
THE REALITY OF VC’S MINDWe are AdBoost, the crowdsourcing approach of advertisement optimization XXXXXXXXXXXX
(interested in ad tech / crowdsourcing)Very interesting business model!!Come to tell me more
(interested in e-commerce)Can take a look at this pitch, but basically I don’t believe in crowdsourcing approach….
How to get Initial Funding? – Hajime Hotta
Founder:
VCs:
MY PERCEPTION (PERSONAL)Excellent team+ Excellent Market+ Excellent Plan
Excellent team+ Excellent Market+ Low quality Plan
Excellent team+ Not interesting Market
Excellent team+ No business plan
How to get Initial Funding? – Hajime Hotta
100
MY PERCEPTION (PERSONAL)Excellent team+ Excellent Market+ Excellent Plan
Excellent team+ Excellent Market+ Low quality Plan
Excellent team+ Not interesting Market
Excellent team+ No business plan
How to get Initial Funding? – Hajime Hotta
100
80
40
9060~
TO ENGINEERS WHO WANTS TO START-UP
» You should contact potential angel investors for brainstorming
» and better to have a clear learning roadmap with mentors,
while working for similar startups
How to get Initial Funding? – Hajime Hotta
WORK AND LEARN TO BE ENTREPRENEUR
Email: [email protected]: http://facebook.com/hotta
Facebook GroupSoutheast Asia Startup Engineers and Founders
How to get Initial Funding? – Hajime Hotta
This amazing startup guide is the result of the collaboration between HATCH! PROGRAM and Ph.D Hajime Hotta, CTO at Cinnamon (Singapore).
Would you have any information or wisdom that should be posted?Please feel free to contact us at:
[email protected](+84) 4 6275 7406http://hatch.vn
CONTACT US