how to fundraise and how to impress investors (launcher @mobcon 2016)

How to fundraise and how to impress investors

Viktor Mikulášek (CEO @ LAUNCHER)

Presentation for MobCon 2016

2Presentation for MobCon 2016

LAUNCHERSTARTUP & INNOVATION STUDIO

LAUNCHER is a company builder that:

covers private investors

provides funding, know-how and enterprise network

develops own invested portfolio

manages acceleration program

hands-on in building young and innovative companies

Viktor MIKULÁŠEKCEO @ LAUNCHER


HOW TO GET READY?

What is important before you start approaching investors?


TAKE SERIOUS DECISION

The decision to fundraise has to be serious because:

The process can take a long time and it can gets complicated (= ROI of used time)*

Defocuses the founders away from business and company development

It might impact your credibility in investor’s eyes

The fundraising is the process and has to be planned!

*Avg. number of attempts = 200-250 to make it done (example from USA)


THE RIGHT TIME

What should a startup achieve before raising funds from investors?*

Obtain market feedback (validation of primary product idea)

Develop a functional prototype

Launch / Public beta towards the target customer group

Readiness to institutionalize (company incorporation and relationships between founders)

Achievable within a short time, with low resources and with low cash requirements(3-6 months; allocation of 1-2 people, even next to a day-job; usually own cash)

*Relates to first time fundraising, not so much for follow-on funding rounds. *Relates to development of typical mobile apps, not for non-IT or complex solutions nor services.


THE RIGHT INVESTOR

What should a startup consider before approaching an investor?

Clear investment opportunity and what to expect from the investor

Investors focus (type, size, experience, industry, geography, history, background, etc.)

Investors strategy (strategic investors vs. financial return oriented investors; not everything is for VC)

Recommendations and track record (previous investments and investment experience)


THE RIGHT INVESTOR

When talking to investor already do the following:

Make sure you understand how VC decides (who are you talking to, lead / not lead investors…)

Ask for the reference or intro to founders the VC has backed

Focus on closing the deal (if not, consider to walk away)

Do not take money from not wealthy people (prefer accredited investors)

Wrong investor can lead to an unsolvable or even fatal situation.Look out for smart money!


TYPES OF INVESTORS & STAGES

START-UP CORE PRODUCT DEVEL MARKET ENTRY MARKET EXPANSION

Typical InvestorsFFF

Business AcceleratorsBusiness Angels

Business AngelsSeed VCs

Strategic Investors

VCsCorporate VCs

Strategic Investors

Growth VCsBuy-Out

Strategic InvestorsInvestment Size 5-50k EUR 100-500k EUR 1-5m EUR 10m+ EUR Startup Age 0-3 months 3-18 months 18-36 months 36month+Number of Employees 2 3-10 11-50 100+Regional Examples HubRaum (PL)

Pioneers Ventures (AT)Launcher

Neulogy Seed CapitalCredo Ventures

Neulogy Venture CapitalJ&T

PentaGlobal Examples Y-Combinator (US)

Seed Camp (UK)500 Startups (US)

Eden Ventures (UK)Sequoia Capital (global)Accel Partners (global) Index Ventures (global)

PRE-SEED STAGE SEED STAGE EARLY STAGE GROWTH STAGE

TIME

FUNDING

IdeaPrototype

PoCPublic Beta

LaunchTraction

ProfitabilityIntl. Expansion


INVESTOR‘S MINDSET

“It‘s all about Value”(overall, capture, measurement, etc.)

When assessing opportunities:

How big is the opportunity?

The right people & structure to succeed?

What tangible evidence of the above?

Impact of Equity Investor on Company Value (Illustrative)

0 Buy(low)

Sell(high)

Addvalue


PREPARATION: WHAT IS A FUNDRAISING?

Fundraising = Enterprise sales process

Use referrals, requires time and focus, be smart while approaching the investor, preparation is king!


PREPARATION: HOW TO PREPARE

Mind-set that you will succeed (not “trying to raise money” nor “exploring options”, etc.)

Fundraising materials ready (pitch, exec summary, presentation, business plan, demo, ready for DD)

Get in shape, pitch 100% and convincing

Get ready for a due diligence, get your house in order

Referrals, find a way via your advisory board, business friends, networking or otherwise

Look for right type of investor (= Do your homework!)


PREPARATION: WHAT INVESTORS LIKE 1/2

Mind-set that you will succeed on your quest

Great founders and balanced team

Vision to fight for, passion and interest

Focus and ROI of invested time

Constructive approach, fair negotiation tactics

Able to articulate a problem

Why are you the one to execute the business

Experience and understanding your business

Good advisors, senior board members

Understand your financials, valuation and setup

Understand investment instruments and terms


PREPARATION: WHAT INVESTORS LIKE 2/2

Investment opportunity is clear (how much for what share, what is the exit strategy)

Fundraising materials ready

Deal with numbers (evidence, track record)

Work with hypothesis, have arguments

Great pitch (tell a story)

Convincing about the secret / magic of the idea

Know your competition

Customer fit, market fit, customer acquisition data

Working prototype (at least)

And more…


PREPARATION: WHAT INVESTORS DONT LIKE

If something is missing or limping from previous points / slideIf your homework is not done!

Good investors will help you solve the problems, but not all of them and not for too long

What not to do (basics & general mistakes):

Solo founder without team

Do not ask for NDA

Fear of missing out

Sending spam, make the communication personal

No really means NO (not everybody likes persistence)

Do not ask for referral if you get NO


NEGOTIATION TACTICS

Only 3 things matters while negotiating the investment deal:

Achieving a good and fair results (for both sides)Not killing personal relationship getting thereUnderstanding the deal

Remember financing is just the beginning of the relationship and a small part of that.

Be collaborative and make clear what are walk-away threats.

Building the company while having a productive & good relationship is what matters most


CONTACT

You can usually find me @ LAUNCHER (www.launcher.sk) or:

[email protected]

https://www.linkedin.com/in/viktor-mikulasek-3244bb4a

Viktor MIKULÁŠEKCEO @ LAUNCHER

how to fundraise and how to impress investors (launcher @mobcon 2016)

Investor Relations