raising angel funding
TRANSCRIPT
Raising Angel Funding
SEEDCHANGEInvest In What’s NextTM
About Your Hosts
2
Kevin SmithFounder and CEO
Sirk RohChief Operating Officer
SEEDCHANGEInvest In What’s NextTM
What’s an angel?
• High net worth/Very high net worth
• Live in tech hubs, typically invest locally
• Well-educated
• Part-time investor
• Sees 50-250 startups/year
• May be member of an angel group
Well-off, either from tech/finance
What kind of companies do angels invest in?
• Companies in seed or early stage
• Typically tech, including clean tech, biotech, healthcare
• Looking for: Solve a problem, management team, IP, business model
How do entrepreneurs connect with angels?
• Full time, 12 hours/day, 4-6 months• Rely on your network• Must have persistence and outstanding
communications skills• Objectives
o Get introductions to 100-250 investorso Meet 50-100 investorso Follow up with 25-75 investorso Conduct diligence process with 25-50 investorso Get checks from 8-15 investors
Questions angels askProduct What’s your business about? Why will people use your
product?How do you make money?
Market How big is your market? Who’s your competition? Distribution?Have you talked to customers? Product-market fit?
Team How did the founders meet?Who is on (and not on) your team?
Risks What is the biggest problem you need to solve now?
Technology and IP
Who owns the IP (and how do you know)?
Funding Justification/Use of FundsMilestonesFinancial projectionsThink ahead to Series A
Questions angels don’t ask (out loud)
• Do the founders like each other?
• Do I trust you?• Can you sell?• Can you build a team?• Can we work together?• What are your weaknesses?• Why isn’t XYZ going to crush
you?
Non-rational criteria
Founders
Do I identify with you?
Industry
University
Experience
Product
Cool factor
Resolving personal pain
Market
Personal experience
Interest
Angel decision-makingtimeline
Contact
Meeting#2
Meeting #5
Meeting #6
Meeting#3
Meeting #1
Meeting#4
$
Decision-making process…
Elevatorpitch
Pitchdeck
Founderinfo
ProductMarketBusiness modelCompetition
Domain expertiseIntelligenceCommunication skillsPersistence IntegrityRelationship
CustomerMarket sizeCompetition
Prob/SolutionTractionProduct-Market fit
Product overview
Market
Product
Decision-making process
Tech Financials Deal Legal
Tech team Use of fundsMilestonesGrowth plan
AmountTermsInvestors
Regulatory threatFormationStock IP
Funding Pitch Guidelines
• Tell a story• Problem• Solution• Market size• Business model• Competition• IP• Team• 10-12 slides maximum• One key point/slide: Backup data in appendix• Don’t read it from slides
Valuations
What is the valuation of my startup?
• Based on traction
• Based on geographical comps
• Entrepreneur ask vs investor tell?
Q&A and Thank You!
14
Kevin Smith
415 Jackson Street
San Francisco, CA 94111
www.seedchange.com
650.703.3749
@kdsmith94010
Sirk Roh
www.earlygrowthfinancialservices.com
415.234.3437
@EarlyGrowthFS
SEEDCHANG
EInvest In What’s
NextTM