How to fund your startup venture

HOW TO FUND YOUR STARTUP

November 2013

RICARDO WEISZ

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TYPES OF STARTUP FUNDING

1. Pre-seed

2. Angel/Seed

3. Series A

4. Follow-up rounds

Idea

F&F

Universities

Incubators

Accelerators

Pre-Seed Funds

Pre

-see

d

Death Valley

Land of Zombies A

nge

l / S

eed

Angel Funds

Pledge Funds

Family Offc.

Seri

es A

Business Plan

MVP

Commercial Launch

Cash Flow +

Proven Product

Proven Market

Paying Customers

Alpha / Beta Proof of Concept

VC

$25K $250K $500K+ $3MM 4

Idea

Venture Hive

The LAB Miami

MEC261

Pipeline

Launchpad P

re-s

eed

MIF

AGP

Accredited Wealthy Investors

An

gel/

see

d

NWA

Gold Coast Venture Forum

AGP

Tamiami

Seri

es A

Business Plan

MVP

Commercial Launch

Cash Flow +

Proven Product

Proven Market

Alpha / Beta Proof of Concept

Florida Growth Fund

HIG Inflexion Antares

$25K $250K $500K+ $3MM 5

THE US VENTURE CAPITAL WORLD

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US Based VC Funds 2,700

US Based family offices 3,000

US based organized Angel groups 450

US accredited investors 15,000

SE High net-worth individuals 8,000

US Ultra high net-worth individuals ($1BB+) 600

US public pension funds 600

LANDSCAPE

2012 Stats Deal

Count Total $

Invested ($M) Median Deal

Size ($M)

Angel/Seed 814 $793M $0.85

VC 1,529 $8,950 $3.5

South East is least active region with less than 15% of all deals

Source: 2013 Annual Venture Rundown by Pitchbook

CRITERIA

• Management • Business plan • Compelling technology, product,

service or market position • Sustainable differentiation • Addressable market size • Investment structure and clear

path to profitability

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DOCUMENTS REQUIRED TO RAISE FUNDS

• Executive summary

• Investment deck

• Detailed financials

• Pitch deck

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FUNDRAISING PROCESS

• It’s about how company will look with investment

• Start with good management; that’s what people invest in

• Fundraising is a slow process

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WHERE DO I START?

• Documents ready

• Gust

• Startup conferences

• Pitch accelerators

• Network

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VALUATION METHODS

• Discounted net present value

• Comparables

• Historical

• Startup market

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VALUATION COMMENTS

• Don’t be greedy

• Be realistic

• Geography is influential

• Personal history

• Career of startups

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WHEN SPEAKING WITH INVESTORS

• Invested in your stage and/or industry in the past 12 months?

• References? • Public Record of Transactions?

Check Form D Filings

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FACTS

• < 5% Investor pitches are investor ready

• Average VC reviews 100 per month • An analyst reviews • 5% Pass screening each month • Principals review those which pass • All funds have scoring mechanisms

and criteria

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ACTUAL PROCESS

• Don’t shop the company until

you’re comfortable you’ll make it

through screening

• 20 to 40 hours a week

• 3 to 6 months to finalize TS and receive money

• 50-75 pitch presentations

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COMMENTARY

• Crowdfunding

• Kickstarter

• Earlyshares

• Convertible debt

• Fundraising never stops

• Geography / Season

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USEFUL LINKS

• http://www.nvca.org/

• https://www.pwcmoneytree.com/

• https://www.gust.com/

• http://www.angelcapitalassociation.org/

• http://www.cbinsights.com/

• https://angel.co/

• http://s.co

• http://www.edc-tech.org

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SOFLA ACCELERATORS

• VentureHive.co

• LabMiami.org

• MEC261.com

• EDC-Tech.org

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SUMMARY

• Do your homework

• Compelling story

• It takes time

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RICARDO WEISZ [email protected]

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