Download - Raising capital
Raising capitalRaising capital
Or no matter how much you think you know about this, it’s never enough.
Babs Carryer, LaunchCyte LLC
Sources of fundsSources of funds
SelfSelf
Debt instrumentsDebt instruments
Venture CapitalVenture Capital AngelsAngels
Friends and familyFriends and family
Uses of fundsUses of funds
• High salariesHigh salaries
• PerksPerks
• Unrealistic financial modelUnrealistic financial model
• Fancy offices and furnitureFancy offices and furniture
• Retreats Retreats
• Founder loan paybackFounder loan payback
•Hiring Hiring
•Basic needs Basic needs
•Product development Product development
•Market testing Market testing
•Customers Customers
Tools you needTools you need
• Poor business planPoor business plan
• No business modelNo business model
• Unrealistic financial modelUnrealistic financial model
• Non-compelling market opportunityNon-compelling market opportunity
• Unclear strategyUnclear strategy
• Inexperienced management teamInexperienced management team
•Good Good
•Better Better
•Best Best
Must havesMust haves
• Funding strategy – source and whyFunding strategy – source and why
• PPM (private placement memorandum)PPM (private placement memorandum)
• Business planBusiness plan
• Risk factorsRisk factors
• Term sheetTerm sheet
• Valuation ideasValuation ideas
• Answers to questionsAnswers to questions
HelpHelp
• Be a cowboyBe a cowboy
• Hire a marketing consultantHire a marketing consultant•Professionals Professionals
•Advisors Advisors
•Board Board
The pitchThe pitch
IntroIntro
Market opportunity
Market opportunity
Market sizeMarket size
TechnologyTechnology Competitive analysis
Competitive analysis
Competitive advantagesCompetitive advantages
Management team
Management team FinancesFinances
Compelling market needCompelling market need
Innovative solutionInnovative solution
A+ teamA+ team
Viable business modelViable business modelReturn on investmentReturn on investment
Core elementsCore elements
Strong sales Strong sales propositionproposition
Visually stimulating not slickVisually stimulating not slick
Good public Good public speaking skillsspeaking skills
Key elements includedKey elements includedSay what you wantSay what you want
No bullshitNo bullshit
Reasonable & Reasonable & supportablesupportable
Short & to the pointShort & to the point
Fundraising then …Fundraising then …
• Plenty of moneyPlenty of money
• Herd mentalityHerd mentality
• Internet sex appealInternet sex appeal
• Minimal materialsMinimal materials
• Seed stage money easierSeed stage money easier
Fundraising now …Fundraising now …
• ConservativeConservative
• Solid business modelSolid business model
• Fear of the dot comFear of the dot com
• Back to the basicsBack to the basics
• Seed stage money almost impossible to findSeed stage money almost impossible to find
LaunchCyte challengesLaunchCyte challenges
• Thank god we’re bioThank god we’re bio
• Incubator stigmaIncubator stigma
• Unique and complex modelUnique and complex model
• Unproven market spaceUnproven market space
• High riskHigh risk
• Inexperienced management teamInexperienced management team
• Local money from individualsLocal money from individuals
What we didWhat we did
• Raised FFF (friends, families and fools) and angel Raised FFF (friends, families and fools) and angel round, then a convertible debt roundround, then a convertible debt round
• Used professionals to helpUsed professionals to help
• Reached our maximumReached our maximum
• Spent wiselySpent wisely
• Addressed core issuesAddressed core issues
• Pushed the business alongPushed the business along
• Developed fundraising strategy for next roundDeveloped fundraising strategy for next round
• Tested strategyTested strategy
Where we areWhere we are
• Fundraising in a lousy climateFundraising in a lousy climate
• First strategic roundFirst strategic round
• Accelerating development of businessAccelerating development of business
• More preparation of planMore preparation of plan
• Getting help againGetting help again
• Still testing our fundraising strategyStill testing our fundraising strategy
Elevator pitchElevator pitch
• 2 minutes2 minutes
• ConceptConcept
• MarketMarket
• TechnologyTechnology
• Competitive advantage(s)Competitive advantage(s)
• Management Management
• ProfitabilityProfitability
SamplesSamples
• YahooYahoo
• amazon.comamazon.com
• CokeCoke
• Proctor and GambleProctor and Gamble
• 3 Com3 Com
• GapGap
• General MotorsGeneral Motors