startup fundraising 101

Startup  Funding  101:    How  To  Get  Started,  with  Adeo  Ressi  

Meet Today’s Moderator Shahab Kaviani Co-Founder | CMO, Onevest • 10+ years as a startup founder • Previously co-founded CoFoundersLab and HyperOffice (exited) • Raised over $800k – including a portion via equity crowdfunding

Disclaimer  

Securities offered through WealthForge, LLC. Member FINRA/SIPC Onevest Corporation ("Onevest") is not a registered broker-dealer and does not give investment advice with respect to any securities. All the startup offerings listed are offered by the applicable Issuer. Onevest has not taken any steps to verify the accuracy of the information provided on the offerings that are listed. Onevest takes no part in the negotiation of the transaction and no securities are executed through Onevest's platform. Onevest receives no compensation in connection with the purchase or sale of securities. Testimonials may not be representative of the experience of all clients. Testimonials are not a guarantee of future performance or success.

CAPABILITIES STATISTICS

50,000 Entrepreneurs and Investors 7,000 introductions per month Companies who have worked with Onevest have collectively raised over $100M in funding

Equity crowdfunding Founder-matching via website and events Connecting investors with promising startups Free live educational webinars

SUCCESSFUL MATCH SUCCESSFULLY RAISED

Boulder,  CO  Built  their  team  on  Onevest  

Techstars  Alumni  

AusCn,  TX  Raised  $750K  w/  the  help  of  Onevest  

Capital  Factory  Alumni  

The New World of Funding

Don’t Be Shooting Blanks

3 Sources of Capital

ITEM FOOLS ANGELS VCS

Full-time Team or Founders - 1 > 2

Proven Domain Expertise - PARTIAL YES

Functioning Prototype - YES YES

Initial Customer Adoption - YES STRONG

Finished Product - - YES

Proven Customer Use Cases - - YES

Monthly Growth >20% - - YES

AMOUNT $25-50K $250-750K $1.5-3.0 MM

Start Here

What to Expect

• 1 Full-time CEO Founder

• 20 Hours per Week

• During All Hours

• 3 to 6 Months

• $5,000 - $15,000 in Legal

• Economics

– Time Invested = 240 Hours

– Earning per Hour = > $1,000

set your strategy

your only goal is to find a lead

The Role of the Lead

• Complete diligence on your company

• Provide credibility to other angel investors

• Set financial terms of the investment

• Provide operating expertise and advice

1. Interest in Your Segment

2. Financial Resources

3. Time & Risk Readiness

Lead

30 Posers

20 Interested

10 Investors

1 Lead

you will get blacklisted by premature fundraising

get out there

attend every industry event

1 2

3

Lead Follow On Connector

build relationships

start by building interest, then convert to a lead

1.Meet 2.Invite to Coffee 3.News Update 4.Meet at Event 5.Dinner Invite 6.Funding Ask 7.News Update

1

2

3

4

5 6

7

Like

liho

od

to

Clo

se

Time

~ 50%

~ 1 Month

the goal of each meeting is to get to the next meeting

$75,000

Hard Circled

Soft Circled

$200,000

75% Likelihood

25% Likelihood

converting a lead

“Would you be interested in being an advisor

and leading the round?”

Compensate the Lead

• Offer an Advisor Position

– Only AFTER agreement to lead

– Start with off the Board, but Board Possible

• Offer Advisory Shares

– 0.5% to 2.5% in options that vest over 2 year

Propose the Terms

• Outline Terms to Lead

– Start with a friendly Convertible Debt Round

• Have Company Counsel Draft Term Sheet

– Reduce the costs of lead’s legal

• Produce the Final Agreements

– Simplify time required to lead

Build Buzz

• Plan a Series of Company Internal Milestones

– Ensure updates in a monthly newsletter

• Organize One Public Announcement before Close

– External validation is key, such as partnerships

• Ensure Metrics are Moving Up and to the Right

– Bad performance during fundraising can kill a deal

closing the deal

Needed to Close

• Strong company counsel engaged

• Agreed upon Term Sheet

• Minimum closing amount

• Minimum investment amount

• Initial closing date

• Maximum amount with a rolling close

The Round Composition

ITEM NUMBER TARGET MIN MIX

Lead Investor 1 1 $50,000 $500,000 +

Large Angels 0 - 5 1 $50,000 $250,000 +

Small Angels 0 - 10 3 $10,000 $25,000

Friends 0 - 3 0 $5,000 $10,000

TOTAL - 5 - 6 $250,000 $500,000

Equity or Convertible

ITEM EQUITY CONVERTIBLE

Term Sheet 3 Pages 1 Page

Closing Costs $15 - $25,000 $5 - $15,000

Position Preferred Owner Option

Control Board and Operations Requiring Capital

Negative Hard to Price Equity New

Positive Clear Ownership Easy and Fast

Valuation

ITEM LOW HIGH

Pre Money 1,000,000 5,000,000

Raise 150,000 1,000,000

Post Money 1,150,000 6,000,000

Option Pool 10% 20%

Ownership 13.0% 23.1%

Fully Dilluted 12.7% 19.6%

in closing…

There are no shortcuts.

Tips

• Be patient and build the relationship

• Don’t ask for investment if “no” is likely

• Investors will say “yes,” but will not fund you

• Practice and refine the pitch constantly

• Don’t give benefits until the deal is done

• Stick to the facts

• Don’t overpromise

Thank you! @founding

Next Steps

•  Visit Onevest.com

•  Visit Learn.Onevest.com

•  Twitter: @onevest

•  Facebook: /onevest