lounge47 do's & dont's of funding #1

12/19/14 1

Do’s + Dont’s of FundingDo’s + Dont’s of Funding

| Kiran Bettadapur || Kiran Bettadapur |

Part - 1Part - 1

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GambleGamble Over-Rated:Over-Rated:

Not ClairvoyantNot Clairvoyant Not Tech-Not Tech-

Savvy...OftenSavvy...Often Picks = GuessworkPicks = Guesswork

1:100 1:100 Ideas : Execution : Ideas : Execution :

SerendipitySerendipity

MODELMODEL

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PerseverancePerseverance 20 Attempts 20 Attempts

DFJDFJ US$ 300K US$ 300K Exit: US$ 400 Mil.Exit: US$ 400 Mil.

0-12 Mil. in 1.5 yrs.0-12 Mil. in 1.5 yrs. 70 Mil. Internet 70 Mil. Internet

UsersUsers Rejection= Rejection=

ConvictionConviction

SELF-BELIEFSELF-BELIEF

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AstrologyAstrology No Method 2 MadnessNo Method 2 Madness

Divine Help OKDivine Help OK All-iz-FairAll-iz-Fair Do What Do What You ThinkYou Think It It

TakesTakes

THOROUGHTHOROUGH

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UtilityUtility Pain Points Pain Points Use Case ScenariosUse Case Scenarios

3WH: Who? When? 3WH: Who? When? Why? How?Why? How?

Market... Not Market... Not TechnologyTechnology

30-sec. Elevator 30-sec. Elevator PitchPitch

DETAILEDDETAILED

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TimingTiming Never Too LateNever Too Late Mover v. ShakerMover v. Shaker Seduction... SlowSeduction... Slow Innovation: Innovation: TrojanTrojan

....Better Execution!....Better Execution!

HURRYHURRY

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SuperioritySuperiority

DisruptionDisruption Compelling Compelling

...Value Proposition...Value Proposition IPR...IPR...Fence/FortresFence/Fortres

ss EvergreeningEvergreening

IMPACTIMPACT

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RevenueRevenue Broken Laser PointerBroken Laser Pointer

...Pez Candy Dispensers...Pez Candy Dispensers Revenue Model?Revenue Model?

Easily Understood?Easily Understood? Planning FailsPlanning Fails Newsworthy Story...Newsworthy Story...

MONETISEMONETISE

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TechnologyTechnology Murphy: Murphy:

Things Happen...Things Happen...World Changes...World Changes...

Risks... Bets go wrong!Risks... Bets go wrong! What-IfWhat-If Course CorrectionCourse Correction

Contingency PlanContingency Plan A-B-CA-B-C

AGILEAGILE

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ProjectionsProjections Simple, Logical MathSimple, Logical Math Use Thumb-rulesUse Thumb-rules

$1 L = $8 C$1 L = $8 C Formula 100-100Formula 100-100

Believable, yet... Believable, yet... Aggressive, AchievableAggressive, Achievable Not ConservativeNot Conservative

REALISTICREALISTIC

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ManagementManagement Whose Money?Whose Money?

Rev = $0.6 mil.Rev = $0.6 mil. Ad Spend = $12 mil.Ad Spend = $12 mil. IPO-Ch. XI = 250 IPO-Ch. XI = 250

days days Blown: $300 Mil.Blown: $300 Mil.

Biz Fundamentals?Biz Fundamentals? P-S-P-S & DP-S-P-S & D

FUMBLEFUMBLE

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ValuationValuation

FINEPRINTFINEPRINT Vulture... Funding TrapVulture... Funding Trap Cash + Sweat + Assets + Cash + Sweat + Assets +

RelationshipsRelationships Tangible & IntangibleTangible & Intangible Client, Supplier & ChannelsClient, Supplier & Channels

Multiple (Rev. or Profit)Multiple (Rev. or Profit) Good LawyerGood Lawyer

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CommandmentsCommandments

Focus on Business ModelFocus on Business Model Have Self-BeliefHave Self-Belief Be ThoroughBe Thorough Drill Down on Use CasesDrill Down on Use Cases Be DisruptiveBe Disruptive Focus on CashflowsFocus on Cashflows Change, if Needed, with Change, if Needed, with

AgilityAgility Be RealisticBe Realistic Tread CarefullyTread Carefully

DO’sDO’s Don’t Rush ThingsDon’t Rush Things Don’t Screw-up After Don’t Screw-up After

FundingFunding

DONT’sDONT’s

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Thank You!Thank You!