how do i raise capital oxford lecture
TRANSCRIPT
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How do I Raise Capital? Dr Ricardo Schäfer & Sia Houchangnia
November 17th
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Sia Houchangnia Dr. Ricardo Schäfer
@SiaHouchangnia @SchaeferRic
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Seedcamp is a Founder’s First Round Fund.
We invest smart capital into pre-seed and seed stage startups,
providing up to €200k and a lifelong platform of Learning,
Network and Capital to support the most ambitious Founders.
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#3 most active European investors in H1 2015
Seedcamp platform recognised as a “mini Andreessen Horowitz” for early stage
Shortlisted as a “Seed Fund of the Year” in 2015 by GP Bullhound
Recognised by the industry as a leading early stage fund
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$350 MillionTotal funding raised by
Seedcamp companies since 2007
Some of the top VCs our companies are raising from
91
87%
89%
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1. Fundraising - Overview 2. Fundraising - Key Considerations 3. Fundraising - Timeline 4. Current European Funding
Environment
Agenda
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1. Fundraising - Overview
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VC = Accelerated growth Bootstrapping = Independence
Why Fundraising?
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Founders’ money, Friends & Family ~£50K
Business Angels (SEIS), Accelerators, Crowdfunding ~£50K - 250K
VCs ~£250K - 1M
~£1M - 5MSeries A
Seed
Pre-seed
Friends & Family round
VCs
Different investors for different stages
Source SizeType of round
Inception
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Discipline Expertise
Access to network Platform value add
Benefits of VC funding
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2. Fundraising - Key Considerations
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FUNDRAISING IS A CONTINUOUS PROCESS.
START PREPARING TODAY
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Stage Focus Sector Focus
Geographic Focus Previous Interactions
Connections with Peers Invested in Competitors
Fund Cycle
What to consider when researching VCs
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Don’t forget to track your communications with potential
investors
Build a fundraising funnel
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When you pitch to VCs Storytelling is key
http://seedcamp.com/the-power-of-great-storytelling/
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1. One Pager 2. Investor Deck 3. Business Model 4. Cap Table
Things you need once you start fundraising
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1. Problem - Every innovation needs a problem
- What’s the exact lack in society, industry or technology?
2. Solution - Show in simple words, pictures or graphics how you
solve the problem or make your customer happy - What are you doing better then the others or
compared to what already exists?
3. The Market - Focus on relevant market (geography, age etc)
- Be realistic! - Market value in $ or €
4. Business Model - How do you generate revenue: commission, ad-based etc.
5. USP - Biggest advantage vs competition
- Why is your business unique? for example: technology, brand, market leader, UX etc..
6. Competition - Matrix diagram
- Where are you now vs in 5 years? - Why are you different?
7. Go-to-Market Strategy - Chanel, conversion rates, cost of acquisition
8. Vision - Where is the company in the long run?
- Expansion plan (geography, products etc)
9. Team - Highlight previous relevant experiences
- Quality of team!
10. Financing needs and how you going to spend the money
- Milestones for next 6-12 (or 18 months)
What to include in a perfect pitch deck
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Starting too late Not speaking to enough VCs
Not raising enough Giving away too much equity early on (>25%)
Overestimating your chances of success Taking a friend as your lawyer
Keep pushing back your timeline for closing the round Not disclosing thorny issues up front
Stopping to run the business
The pitfalls of fundraising
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3. Fundraising - Timeline
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DocSend fundraising research, 2015
Some stats on a typical seed round
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Rejections are common…even for Airbnb
7 Rejections, Brian Chesky, 2015
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You need a clear start and finish line for your active
fundraising…
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FOMO… as you will need to create:
[ = Fear of Missing Out ]
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1.#Be#ReadyAll#about#Prep
2.#StartExecute
Termsheet
3.#Close
Company.readinessStory/deckRehearsalCompany.Strat/planNumbersTraction
Fundraising. PlanTargeting.(fit)Intro’sDrive.the.process
*Ultimate.Goal
$(1I6.months) (3I4.months) (1.month)
The 3 phases of fundraising: Prepare, Execute, Close
Fundraising Guide, Scott Sage
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The timeline of a typical round
Fundraising Guide, Scott Sage
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4. Current European Funding Environment
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The European unicorns
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Increasing number of Entrepreneurs turned Investors in Europe
The State of European Tech, Slush & Atomico, 2015
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New funds being launched
The State of European Tech, Slush & Atomico, 2015
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More and more capital for Europe
The State of European Tech, Slush & Atomico, 2015
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Crowdfunding & non-VC investors pushing valuations up
Venture Capital Outlook 2016, Mark Suster & Kevin Zhang, 2015
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Still a lot to catch up
The State of European Tech, Slush & Atomico, 2015
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Thank you