how to get funding: inside the investor’s mind, early investment by jeff clavier
DESCRIPTION
Whether you ever raise funding from investors or not, you as an entrepreneur really benefit from being able to see your business through the investor’s eyes. Check our more of the early investor’s Jeff Clavier mindset in the infographic above. TEAM Jeff: "How do I feel about working with this team 5-6 year?" - the ideal combo: 1 developer, 1 designer, 1 business expert - too many people: 5 founders - lonely journey(but you can do it): solo founder (ex. mint.com( - seen it work: married (ex. Eventbrite) - who will build?: all business experts PRODUCT - alpha product released - is there organic retention - what's the user acquisition model? TRACTION -revenue opportunities - feedback from early users - retention is key - unit economics - rough acquisition costs: SEM, Facebook, PPI - comparables: LTV, RVP, rDAU MARKET OPPORTUNITY - Enterprise (SaaS): $10-$50M revenue, within 3 years - Consumer product: 10M-100M users VALUATION Jeff: "I like everything so far, but what will it take to raise Series A 18 months from now?" - is it expensive to build (ex. e-commerce marketplace) - Are VCs interested in this type of product? OK, I'LL INVEST FUNDING - last as long as you can (family&friends), Bootstrap, 0-$100K - lasts 12-18 months, Seed, $1M - 1.5M - lasts 2 years, Series A, $3M - $5M - Series B, $8M - $15M FOUNDER DILUTION Source: http://fundersandfounders.com/inside-the-investors-mind-jeff-clavier-early-investment/TRANSCRIPT
FundersandFounders.comsofttechvc.com
SoftTechVC̓s Result (lost about 20%)
Traditional VC expectation:“I will lose 30% of my investments”
ex. Mint.com17x return
30 got acquired
25dead
still going on
(since 2004)
140 companies funded
Does it work?
I can sum it all upfor you in my “3-Asses Rule”
smart teamkick productbig market
what never works
no crisp vision of product
no vision how to acquire users
founder says “In 5 years Google will buy us”
is it working?
will the company raise series A?
yes
great!
acquisition
let̓s find a soft landing
aquihire
no
cost of funding
always use lawyers
incorporation & convertible note
equity round
other rounds
$5000
$20,000$30,000
$30,000$50,000
funds contacted
don̓t talk tocompetitors
pre-marketing - 5 funds
while fundraising10 out of life of
20-25 funds
other investors
who̓sjoiningus?5-15
in captable
1-3 uVCs
1 traditional VC(if you must)
helpful angels(with expertise, time, Rolodex, syndication)
founder dilution
incubators
seed roundoption pool
round
5%-10%
10%-20%
20%-25%
20%-25%Series A
funding
$1M - $1.5M
Seed
Series A
Bootstrap
Series B
$3M - $5M
last as long as you can(family&friends)
lasts 12-18 months
lasts 2 years
$8M - $15M
0 - $100K
ok,
I̓ll invest valuation
is it expensive tobuild (ex. e-commercemarketplace)
Are VCsinterested inthis type ofproduct?
I like everything so far, but what will it take to raise Series A18 months from now?
market opportunity
$10-$50Mrevenue
Enterprise(SaaS)
Consumerproduct
10M-100Musers
within3 years
traction
comparablesrough acquisition costsLTV
RVP rDAU
SEMFacebook
PPI
revenue opportunities
feedback from early users
retention is key
unit economics
product
is there organic retention?
what̓s the user acquisition model?
alpha product released
team
seen it work
How do I feel about working with this team 5-7 years?
1 developer 1 designer 1 business expert
- married(ex. Eventbrite)
- solo founder (ex. mint.com)
who will build?
- 5 founders
- all business experts
the ideal combo
too many people
lonely journey,but you can do it
Jeff Clavier Walks Through Early Investment AnalysisInside The Investors̓s Mind
by Anna Vital
seen it work
team
1 developer 1 designer 1 business expert
- married(ex. Eventbrite)
- solo founder (ex. mint.com)
who will build?
- 5 founders
- all business experts
the ideal combo
too many people
lonely journey,but you can do it
How do I feel about working with this team 5-7 years?
TEAM
product
is there organic retention?
what̓s the user acquisition model?
alpha product released
PRODUCT
comparablesrough acquisition costsLTV RVP rDAU
SEMFacebook
PPI
traction
revenue opportunities
feedback from early users
retention is key
unit economics
TRACTION
$10-$50Mrevenue
Enterprise(SaaS)
Consumerproduct
10M-100Musers
market opportunity
within3 years
MARKET OPPORTUNITY
is it expensive tobuild (ex. e-commercemarketplace)
Are VCsinterested inthis type ofproduct?
valuation
I like everything so far, but what will it take to raise Series A18 months from now?
VALUATION
valuation funding
ok,
I̓ll invest
OK, I̓LL INVEST
funding
$1M - $1.5M
Seed
Series A
Bootstrap
Series B
$3M - $5M
last as long as you can(family&friends)
lasts 12-18 months
lasts 2 years
$8M - $15M
0 - $100K
FUNDING
founder dilution
incubators
seed roundoption pool
round
5%-10%
10%-20%
20%-25%
20%-25%Series A
FOUNDER DILUTION
who̓sjoiningus? 5-15
in captable
1-3 uVCs
1 traditional VC(if you must)
helpful angels(with expertise, time, Rolodex, syndication)
other investors
OTHER INVESTORS
funds contacted
don̓t talk tocompetitors
pre-marketing - 5 funds
while fundraising10 out of life of
20-25 funds
FUNDS CONTACTED
cost of funding
always use lawyers
incorporation & convertible note
equity round
other rounds
$5000
$20,000$30,000
$30,000$50,000
COST OF FUNDING
is it working?
will the company raise series A?
yes
great!
acquisition
let̓s find a soft landing
aquihire
no
IS IT WORKING?
what never works
no crisp vision of product
no vision how to acquire users
founder says “In 5 years Google will buy us”
WHAT NEVER WORKS
I can sum it all upfor you in my “3-Asses Rule”
smart teamkick productbig market
THE RULE
THE RESULTSoftTechVC
30 got acquired
25dead
still going on
(since 2004)
140 companies funded
ex. Mint.com17x return
30 got acquired
FundersandFounders.com
softtechvc.com