how do i raise capital oxford lecture

How do I Raise Capital? Dr Ricardo Schäfer & Sia Houchangnia

November 17th

Sia Houchangnia Dr. Ricardo Schäfer

@SiaHouchangnia @SchaeferRic

Seedcamp is a Founder’s First Round Fund.

We invest smart capital into pre-seed and seed stage startups,

providing up to €200k and a lifelong platform of Learning,

Network and Capital to support the most ambitious Founders.

#3 most active European investors in H1 2015

Seedcamp platform recognised as a “mini Andreessen Horowitz” for early stage

Shortlisted as a “Seed Fund of the Year” in 2015 by GP Bullhound

Recognised by the industry as a leading early stage fund

$350 MillionTotal funding raised by

Seedcamp companies since 2007

Some of the top VCs our companies are raising from

91

87%

89%

1. Fundraising - Overview 2. Fundraising - Key Considerations 3. Fundraising - Timeline 4. Current European Funding

Environment

Agenda

1. Fundraising - Overview

VC = Accelerated growth Bootstrapping = Independence

Why Fundraising?

Founders’ money, Friends & Family ~£50K

Business Angels (SEIS), Accelerators, Crowdfunding ~£50K - 250K

VCs ~£250K - 1M

~£1M - 5MSeries A

Seed

Pre-seed

Friends & Family round

VCs

Different investors for different stages

Source SizeType of round

Inception

Discipline Expertise

Access to network Platform value add

Benefits of VC funding

2. Fundraising - Key Considerations

FUNDRAISING IS A CONTINUOUS PROCESS.

START PREPARING TODAY

Stage Focus Sector Focus

Geographic Focus Previous Interactions

Connections with Peers Invested in Competitors

Fund Cycle

What to consider when researching VCs

Don’t forget to track your communications with potential

investors

Build a fundraising funnel

When you pitch to VCs Storytelling is key

http://seedcamp.com/the-power-of-great-storytelling/

1. One Pager 2. Investor Deck 3. Business Model 4. Cap Table

Things you need once you start fundraising

1. Problem - Every innovation needs a problem

- What’s the exact lack in society, industry or technology?

2. Solution - Show in simple words, pictures or graphics how you

solve the problem or make your customer happy - What are you doing better then the others or

compared to what already exists?

3. The Market - Focus on relevant market (geography, age etc)

- Be realistic! - Market value in $ or €

4. Business Model - How do you generate revenue: commission, ad-based etc.

5. USP - Biggest advantage vs competition

- Why is your business unique? for example: technology, brand, market leader, UX etc..

6. Competition - Matrix diagram

- Where are you now vs in 5 years? - Why are you different?

7. Go-to-Market Strategy - Chanel, conversion rates, cost of acquisition

8. Vision - Where is the company in the long run?

- Expansion plan (geography, products etc)

9. Team - Highlight previous relevant experiences

- Quality of team!

10. Financing needs and how you going to spend the money

- Milestones for next 6-12 (or 18 months)

What to include in a perfect pitch deck

Starting too late Not speaking to enough VCs

Not raising enough Giving away too much equity early on (>25%)

Overestimating your chances of success Taking a friend as your lawyer

Keep pushing back your timeline for closing the round Not disclosing thorny issues up front

Stopping to run the business

The pitfalls of fundraising

3. Fundraising - Timeline

DocSend fundraising research, 2015

Some stats on a typical seed round

Rejections are common…even for Airbnb

7 Rejections, Brian Chesky, 2015

You need a clear start and finish line for your active

fundraising…

FOMO… as you will need to create:

[ = Fear of Missing Out ]

1.#Be#ReadyAll#about#Prep

2.#StartExecute

Termsheet

3.#Close

Company.readinessStory/deckRehearsalCompany.Strat/planNumbersTraction

Fundraising. PlanTargeting.(fit)Intro’sDrive.the.process

*Ultimate.Goal

$(1I6.months) (3I4.months) (1.month)

The 3 phases of fundraising: Prepare, Execute, Close

Fundraising Guide, Scott Sage

The timeline of a typical round

Fundraising Guide, Scott Sage

4. Current European Funding Environment

The European unicorns

Increasing number of Entrepreneurs turned Investors in Europe

The State of European Tech, Slush & Atomico, 2015

New funds being launched

The State of European Tech, Slush & Atomico, 2015

More and more capital for Europe

The State of European Tech, Slush & Atomico, 2015

Crowdfunding & non-VC investors pushing valuations up

Venture Capital Outlook 2016, Mark Suster & Kevin Zhang, 2015

Still a lot to catch up

The State of European Tech, Slush & Atomico, 2015

Thank you