FUNDRAISINGAS A SALES PROCESS

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ABOUT ME

• Founder at ToutApp, we build software to empower sales people

• Raised Advisory, Seed, and Venture Capital

• Fell in love with the art of selling

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GOAL

Share what I’ve learned about Fundraising so that you can go from being a seed-level company to a solid venture backed company.

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KEY CONCEPTS

1. Why you should think about fundraising as a sales process

2. What to do before you fundraise

3. How to actually run your fundraising like a sales process

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HOW YOU THINK ABOUT FUNDRAISING

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“We’re getting ready to

raise our Series A. We’ve got great traction. Revenues are growing. Our customers love us. We’re looking to raise $3m to $5m.”

HOW INVESTORS THINK ABOUT YOU

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• As a VC, I can only fill X board seats

• With my $Y fund, each deal I make needs to have a likelihood of returning > $Y

• There are only about 15 to 20 seriously important companies every year

• Should I buy what you’reselling?

WHAT’RE YOU SELLING?

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25%

25%25%

25%

Founders Series A Series B Pool

#1 RULE OF SELLING

Why You?

Why Now?

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PRINCIPLES OF SELLING

1. Who is the right buyer for what you’re selling?

2. Understand your buyer, what do they care about?

3. Why should they choose you? What makes you unique?

4. How do you articulate and pitch them on Why You? Why Now?

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HOW YOU THINK THOUGHT ABOUT FUNDRAISING

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“We’re getting ready to

raise our Series A. We’ve got great traction. Revenues are growing. Our customers love us. We’re looking to raise $3m $5m.”

A CLEARER WAY TO PITCH YOUR DEAL

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“We believe X is going to

happen. Our seed round allowed us to prove Y. We think with another $Z in the bank we’ll be able to tackle this problem and get to the next stage. And when we do that, we’re going to make a lot of money in a market that is worth $AA.”

IT TAKES MONTHS TO PREPAREIT SHOULD TAKE WEEKS TO DO A DEAL

Identify Potential

Buyers

Build Relationships & Understand

Develop Pitch Fundraise

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You are NOT Raising You ARE Raising

(months) (weeks)

PREP #1 – HAVE A PLAN

1. How much runway do you have?

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PREP #1 – HAVE A PLAN

1. How much runway do you have?

2. Plan to kick off fundraising when you have 6 months of runway left

3. Based on your financial model, figure out how much money you actually need to raise

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PREP #2 – IDENTIFY POTENTIAL BUYERS

1. There are hundreds of VC firms

2. There are more ways to raise money than just VC

3. There are VCs and Investors that care about stage, category, business model, and even about the type of founder you are

4. Don’t just aim for Sequoia to write you a $20m check

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PREP #2B – RESEARCH BUYERS

1. Identify your ideal buyer by doing your research on the firms

2. Crunchbase, LinkedIn, TheFunded and funding announcements

3. Don’t just look at firms, focus on actual partners; you’re getting married

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OUR SERIES A WITH SIGMA WEST

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PREP #2B – RESEARCH BUYERS

1. Find investors that have invested in your broader space and category in the past; ideally with successful exits

2. For clues, look at the types of investors that have placed bets on your competitors

3. Look at their fund size. There are lots of cues to pick up here

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PREP #4 – BUILD RELATIONSHIPS

1. You’re not raising

2. You’re mapping out the people you want to target

3. You’re figuring out how to get introductions

4. You’re looking to build a longer term relationship

5. You’re looking to get advice

6. You’re asking a lot of questions

7. There is no deck

8. BTW. You’re not raising

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PREP #4A – RELATIONSHIP HACK

1. Talk to Portfolio company CEOs

2. Ask them the type of investors they are, ask them how they add value, ask them for advice

3. SELL them. The more portfolio companies you have as customers the easier it’ll be for you to sell down the line

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PREP #5 – DEVELOP YOUR PITCH DECK

1. Don’t leave this for the last minute or for “after” you get your meetings

2. Treat this with respect. It requires you to have a very deep understanding of your business, your numbers

3. A huge part of this is for you to develop your unique vision for what you want out of your company

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PREP #6 – DEVELOP YOUR SUPPORT STRUCTURE

1. Have strong customer references you can call upon at a moment’s notice

2. Have one spreadsheet with tabs outlining the core metrics around your business

3. Have a clean set of financials

4. Have a shared Dropbox folder ready to go with everything

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GET READY

You’re going to meet some of the smartest and most successful people on Planet Earth. Enjoy it.

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THE SALES PROCESS

Initial Pitch

Deeper Pitch

Partner Meeting

Initial Due Diligence

Term Sheet

Due Diligence

Close

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2 to 8 Weeks 4 Weeks MAX

MUST DON’TS OF THE PROCESS

1. Don’t spent too much time with Associates or Principles

2. Don’t spend too much time if you haven’t gotten to meeting with the partnership after the 2nd or 3rd meeting

3. Don’t be shy. You’re raising. OWN IT

4. Don’t do your favorite firm first. First 6 pitches are for practice

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PREPARE FOR BATTLE

1. You need to maintain your positivity, you need to be assertive, you need to drive forward with conviction

2. You need to make the entire process dead simple easy for the investor to say “Yes”

3. You need to consistently be asking the tough question, are you interested in “buying”? What are next steps?

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CONSIDER THE STATS

1. 0.5% of people attempting to raise money end up raising

2. 20% of startup founders who raise end up with something that is worth something

3. 0.1% chance you’ll make money from your venture after you raise

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BE THE UNICORN

1. Solo Founder

2. No Prior CEO Experience

3. No Network

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HAVE A PLAN BSO YOU FEEL CONFIDENT

1. What part of your business can you re-focus to start generating cash?

2. How can you cut expenses? Reduce burn? Extend runway?

1. Are there alternative exit scenarios?

2. Take a long hard look. Is it time to move to the next idea?

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IF YOU DO RAISE

1. Pause and Reflect

2. Think carefully about what you’re going to do with the money

1. If possible, create a rough pitch deck for your next fundraising

2. Buckle up

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TRUST IN THE PROCESS

Identify Potential

Buyers

Build Relationships & Understand

Develop Pitch Fundraise

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You WILL Raise

ABOUT ME

• Twitter: @tawheed

• I blog, a lot: tawheedkader.com

• Email: tawheed@gmail.com

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