raising capital

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Raising capital Raising capital Or no matter how much you think you know about this, it’s never enough. Babs Carryer, LaunchCyte LLC

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Raising capital. Or no matter how much you think you know about this, it’s never enough. Babs Carryer, LaunchCyte LLC. Sources of funds. Self. Debt instruments. Friends and family. Venture Capital. Angels. Uses of funds. High salaries Perks Unrealistic financial model - PowerPoint PPT Presentation

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Page 1: Raising capital

Raising capitalRaising capital

Or no matter how much you think you know about this, it’s never enough.

Babs Carryer, LaunchCyte LLC

Page 2: Raising capital

Sources of fundsSources of funds

SelfSelf

Debt instrumentsDebt instruments

Venture CapitalVenture Capital AngelsAngels

Friends and familyFriends and family

Page 3: Raising capital

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

Page 4: Raising capital

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

Page 5: Raising capital

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

Page 6: Raising capital

HelpHelp

• Be a cowboyBe a cowboy

• Hire a marketing consultantHire a marketing consultant•Professionals Professionals

•Advisors Advisors

•Board Board

Page 7: Raising capital

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

Page 8: Raising capital

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

Page 9: Raising capital

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

Page 10: Raising capital

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

Page 11: Raising capital

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

Page 12: Raising capital

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

Page 13: Raising capital

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

Page 14: Raising capital

Elevator pitchElevator pitch

• 2 minutes2 minutes

• ConceptConcept

• MarketMarket

• TechnologyTechnology

• Competitive advantage(s)Competitive advantage(s)

• Management Management

• ProfitabilityProfitability

Page 15: Raising capital

SamplesSamples

• YahooYahoo

• amazon.comamazon.com

• CokeCoke

• Proctor and GambleProctor and Gamble

• 3 Com3 Com

• GapGap

• General MotorsGeneral Motors