Fundraising in Silicon Valley with 500 Startups Prepared by Sean Percival in partnership with Startup Norway
Aug 06, 2015
Fundraising in Silicon Valleywith 500 Startups
Prepared by Sean Percival in partnership with Startup Norway
500 Startups at a Glance
“500 Startups is the most active seed investor in Silicon Valley tech companies”
The Silicon Valley Tech Venture Capital Almanac, Fall 2013
950+Investments
$100MDeployed
4Years
500 Startups Values
•Be Bold, Be Humble•Move Fast, Break Things• Challenge Yourself, and Others•Be Diverse, and Diversified •Have Fun, Make Money
About the 500 Startups Accelerator
• Next program starts in Mid-April (and every 3-4 months)• Program runs for 3.5 months• Demo Day sometime in August
• We make a $100K investment for 7% of your company• There is a $25K program fee• We invest through a convertible security structure
Upcoming Dates
Investment Details
• 4 batches a year with 30 companies per batch• Strong focus on marketing, design and fundraising• 200+ of the best mentors in Silicon Valley and beyond
General
What are accelerators looking for?
• A live product (MVP or more)• Some initial traction (although the more the better)
• Momentum in your metrics• Founders who are full-time focused• Core founding team is in place• Ability to articulate your business/metrics
You should have a few of these:
Current Landscape for Valuations and Round Size
Pre Seed Stage$1.5M-$2M Valuation$100K Raised
Accelerator level with a working MVP and 3-6 months of user data
Seed Stage$3M-$8M Valuation$1M-$3M Raised
Series A$10M-$50M Valuation$5M-$10M Raised
Post accelerator stage with 30% MoM growth and $500K+ ARR revenue or thousands of users or MAU
Starting to scale and doing several million in revenue or six figure users/MAU
Hacks for Fundraising in the Valley
• Leverage the accelerators for validation• Leverage US advisors for validation• Get US customers/clients/users • Use AngelList• Have the right corp structure (Delaware C-Corp)
• Find brand name investors/advisors• Have a presence in the valley• Be confident, and sometimes arrogant
Funding Vehicles
Convertible Note• Debt Instrument (although that’s misleading)• Purchasing equity that converts when raising an equity round• Offers early investors a discount• Look at the 500 Startups KISS note or the YC SAFE note• Low legal overhead and reduced legal costs
Equity Priced Round• A lead investors sets the price (the valuation)• No discounts• Reserved usually for later stage investments (Series A)• High legal overhead and costs ($25K)
Get in Contact
Email: [email protected]: @percival and @500startupsIRL: Visit Mountain View, California