Download - How to Raise Startup Capital in 6 Easy Steps
How to Raise StartupCapital in 6 Easy Steps
by Eric M. Jackson CEO of CapLinked; author of The PayPal Wars
6 Steps to Funding1. Structure Your Deal
2. Prepare Your Documents
3. Identify Your Leads
4. Make Your Pitch
5. Follow Up
6. Close the Deal
#1: Structure Your DealSize of the Deal
ValuationPre-Money vs. Post-Money20% Rule of Thumb
Equity or DebtStock: Common vs. PreferredConvertible Notes
When Do You Close?
Important: Work with an Attorney!
#2: Prepare Your Documents
Slide Deck vs. Business Plan
Capitalization Table
Financial Projections
Transaction Documents:Term SheetPurchase AgreementShareholder Rights
Agreement or Convertible Note
#3: Identify Your LeadsPut Your Network to Work
What Do You Mean You Don’t Know Anyone?!?
Ask for Referrals
Accredited InvestorsRegulation D + Subsequent Rounds
VCs vs. Angels vs. Super Angels
Other Investor Sources:Angel Groups (TCA, Pasadena, Maverick)3rd Party Sites: LinkedIn, AngelList, CapLinked
#4: Make Your PitchGet an Intro (don’t cold email)
Share Information w/ Them (slides, deal room)
Set up a Meeting or Call (only if interested)
Meeting Checklist: Elevator PitchProblem You’re SolvingMarket SizeBusiness ModelTractionListen!!!
#5: Follow UpSorry, You’re Not That Hot… (So Persistence
Will Be Required!!!)
Track Your Leads
Send Updates
Due DiligenceMake Sure Questions are Clear
Getting an AnswerAngels Don’t Like to Say No
#6: Close the DealFrom Slow to Fast
Let Prospects Know as Round Fills Up
Typical Closing Process:Collect Signed DocumentsConfirm WiresCounter-Sign Documents
Announce to Media
Start Working on Next Round