insiders view on how to raise vc capital.dahlberg_cet_ucb.2009-04-13

8/7/2019 Insiders View on How to Raise VC Capital.Dahlberg_CET_UCB.2009-04-13

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An Insiders View:An Insiders View:

How to Raise MoneyHow to Raise Money

from VCsfrom VCsBob DahlbergBob Dahlberg

PartnerPartnerHorizon VenturesHorizon VenturesLos Altos, CALos Altos, CABob at horizonvc comBob at horizonvc com


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April, 2009 2Copyright 2007, 2008, 2009 Robert W. Dahlberg

AgendaAgenda

VC financing +s andVC financing +s and ss

How VCs decideHow VCs decide

The VC dating gameThe VC dating game


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Venture Capital Isnt RequiredVenture Capital Isnt Required

To Build a Great Business To Build a Great Business BroadcomBroadcom

No VC moneyNo VC money

CiscoCisco $5M in revenue, profitable before Sequoia invested$5M in revenue, profitable before Sequoia invested

DellDell Raised money at $60M in revenueRaised money at $60M in revenue

eBayeBay $4.5M in revenue and profitable before Benchmark$4.5M in revenue and profitable before Benchmark

investedinvested MicrosoftMicrosoft

VC funded after being profitableVC funded after being profitable

The MathWorksThe MathWorks >$300M in revenue, no VC money>$300M in revenue, no VC money

OracleOracle Government contract funded first productGovernment contract funded first product

SAS InstituteSAS Institute > $1.9B in revenue, the largest private software> $1.9B in revenue, the largest private software

company, no VC moneycompany, no VC money

SiebelSiebel

Customers funded first productCustomers funded first product


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VC Financing Comes with CostsVC Financing Comes with Costs

Fund raising takes time away from servingFund raising takes time away from serving

customerscustomers False sense of security: it masks viabilityFalse sense of security: it masks viability

Money enables costly mistakesMoney enables costly mistakes

Money removes spending disciplineMoney removes spending discipline

Adds additional master(s)Adds additional master(s)

You give up a lot of ownershipYou give up a lot of ownership Sets the exit strategy and timingSets the exit strategy and timing

Source: Greg Gianforte, CEO RightNow, http://cet.berkeley.edu/Resources/CETLectures.html


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But it Sure Can HelpBut it Sure Can Help

1.1. Cash to fuel growthCash to fuel growth2.2. Strategy / business adviceStrategy / business advice

3.3. Introductions: investors, customers and partnersIntroductions: investors, customers and partners4.4. RecruitingRecruiting


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AgendaAgenda


How VCs DecideHow VCs Decide



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We Live in Unprecedented TimesWe Live in Unprecedented Times

Facing the worst economy since the 30sFacing the worst economy since the 30s

No IPO marketNo IPO market

Average time to M&A is 6 years,Average time to M&A is 6 years,IPO is 8 years,IPO is 8 years,

Deal StatusDeal Status

Most deals in the last 6 months were follow on withMost deals in the last 6 months were follow on withexisting investors.existing investors.

New investors are asking for 30New investors are asking for 30 40% down40% downrounds, or are waiting for prices to fall.rounds, or are waiting for prices to fall.


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Against that backdrop .....Against that backdrop .....


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How do Most VCs Decide?How do Most VCs Decide?

Youll first have to understand VCYoull first have to understand VCcare abouts ....care abouts ....


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VCs Want to do DealsVCs Want to do Deals Deliver Big Returns to their LPsDeliver Big Returns to their LPs

SOURCE: TheFunded.com, NVCA / Thompson Reuters Exit Poll and VC Fundraising Q3

VC Exit Value vs. Money Raised

$0

$5,000

$10,000

$15,000

$20,000

$25,000$30,000

$35,000

$40,000

$45,000

2003 2004 2005 2006 2007 1H

2008

VC Exits

VC Fundraising


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Good Deals are Hard to FindGood Deals are Hard to Find

We kiss a lot of frogs toWe kiss a lot of frogs to

find the princefind the prince-- Venture capital industry clich


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Venture Grade Deals are 1/200Venture Grade Deals are 1/200% 2003 Corporate Tax Returns by

Revenue

2.2% 1.9%

81.8%

0.5%

13.6%

0%

20%

40%

60%

80%

100%

< $1M < $5M < $10M < $50M >$50M

Revenue

Percen

tof

5.4MReturns

Source: IRS.gov

VCGradeLife Style CompaniesAKA Walking Dead


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Its Hard to Spot WinnersIts Hard to Spot Winners

Every deal has hair on itEvery deal has hair on it

Its easy to find many, many problemsIts easy to find many, many problems

EBAY: OnEBAY: On--line flea market? Come on!line flea market? Come on!

Google: 5 CEO candidates passed before Eric S.Google: 5 CEO candidates passed before Eric S.

Search is doneSearch is done

It is not easy to discern a winner:It is not easy to discern a winner: Portfolio returns: 1 @ 10X; 2 @ 1X; 7@0XPortfolio returns: 1 @ 10X; 2 @ 1X; 7@0X


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VCs Personal Bias is a FactorVCs Personal Bias is a Factor

Will be working together for 6+ yearsWill be working together for 6+ years

The project must be interestingThe project must be interesting

Team compatibility is criticalTeam compatibility is critical

The unexpected is going to happenThe unexpected is going to happen

Got to get through the hard timesGot to get through the hard times


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So How do Most VCs Decide?So How do Most VCs Decide?

VCs VCs fall in love with the dealfall in love with the deal


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Your StartYour Start--Up Must Be AttractiveUp Must Be Attractive


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Attractive is....Attractive is.... Big MarketBig Market

Open to disruptionOpen to disruption Customers in pain and who buyCustomers in pain and who buy

Growing order trendGrowing order trend

Strong product offering / technologyStrong product offering / technology Differentiated, protectedDifferentiated, protected

Successful TeamSuccessful Team

A PlayersA Players Successful Investors / Advisors / Board MembersSuccessful Investors / Advisors / Board Members


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AgendaAgenda


How VCs DecideHow VCs Decide



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VC Dating is a Grueling ProcessVC Dating is a Grueling Process

1.1. Requires mental toughnessRequires mental toughness2.2. You may have to talk to 10You may have to talk to 10 40 firms to find40 firms to find

the matchthe match3.3. Success demands careful planning andSuccess demands careful planning and

executionexecution


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Time ScalesTime Scales

11

IntroductionIntroduction22

First DateFirst Date33

DatingDating

1 to 6 weeks

2 to 12 weeks

Per VC

Per VC

Per Funding2 to 26 weeks


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It Will Be the BestIt Will Be the Best

Business Advice Youll ever GetBusiness Advice Youll ever Get

1.1. ListenListen2.2. LearnLearn

3.3.

Accept itAccept it4.4. Bake learnings into your business planBake learnings into your business plan


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Step 1: IntroductionStep 1: Introduction

GoalGoal: Get the first date: Get the first date

StrategyStrategy: Approach: Approach the right VC, rightthe right VC, right

IntroductionIntroduction The PitchThe Pitch DueDueDiligenceDiligence


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The Right VC, RightThe Right VC, Right

1.1. Right VCs,Right VCs,

2.2. The Right WayThe Right Way


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The Right VCThe Right VC

has Greener Moneyhas Greener Money

VC money is not a bank loanVC money is not a bank loan

Do your homeworkDo your homework!!

Talk to startTalk to start--up CEOsup CEOs

Actively investingActively investing Right sector (life sciences vs. semiconductor)Right sector (life sciences vs. semiconductor)

Relevant portfolio, expertise, and synergiesRelevant portfolio, expertise, and synergies

Early vs. late stageEarly vs. late stage


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Funding to Customer ValidationFunding to Customer Validation CustomersCustomers

Consulting engagementsConsulting engagements

NonNon--Recurring Engineering (NRE) engagementsRecurring Engineering (NRE) engagements Retainer fees from customersRetainer fees from customers

GovernmentGovernment Small Business Innovation Research Grants (SBIR)Small Business Innovation Research Grants (SBIR)

Big CompaniesBig Companies ValueValue--Added Reseller (VAR) agreementsAdded Reseller (VAR) agreements

DivestituresDivestitures protected supplier contract with parent for aprotected supplier contract with parent for a

defined perioddefined period

MoonlightingMoonlighting Founders waive compensationFounders waive compensation

Family, Friends and FoolsFamily, Friends and Fools


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Approach the Right VC, RightApproach the Right VC, Right

1.1. Right VCs,Right VCs,

2.2. The Right WayThe Right Way


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The Right WayThe Right Way

We only look at deals that areWe only look at deals that are

introduced to us by people we knowintroduced to us by people we know

Mike Schuh, Foundation CapitalMike Schuh, Foundation Capital


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Study Finds Business Plans a WasteStudy Finds Business Plans a Waste

See: http://www.rhsmith.umd.edu/news/releases/2009/040809.aspx

Social connections trump business plans

by a long shot, says Goldfarb. Thus it is

that people who already know VCs and

angels have an easier time raising money.

The irony, says Goldfarb, is that people

who dont have connections need to go

out and make them, which may require

that they have a business plan to discuss.

But the plan is sort of like a businesscard, he says just something that

business protocol dictates you carry

around.

Social connections trump business plans

by a long shot, says Goldfarb. Thus it is

that people who already know VCs and

angels have an easier time raising money.The irony, says Goldfarb, is that people

who dont have connections need to go

out and make them, which may require

that they have a business plan to discuss.

But the plan is sort of like a businesscard, he says just something that

business protocol dictates you carry

around.


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The Right Way:The Right Way:

Introduction by ReferralIntroduction by Referral

1.1. Successful entrepreneursSuccessful entrepreneurs

2.2. Lawyers that work with VCs and startLawyers that work with VCs and start--upsups3.3. Angel investorsAngel investors

4.4. VCsVCs

5.5. Other service providers:Other service providers:

bankers, head hunters, bankers, head hunters,

Avoid BrokersAvoid Brokers (= Mothers(= Mothers--inin--Law)Law)

Create a buffer layer in between you and VCs.Create a buffer layer in between you and VCs.


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Sales Tool:Sales Tool:

The Executive SummaryThe Executive Summary

Tool ObjectiveTool Objective: To get a meeting: To get a meeting

One pager that covers:One pager that covers: Contact informationContact information

Customer problemCustomer problem

Your solution (product/technology)Your solution (product/technology)

Market sizeMarket size

CompetitorsCompetitors

TeamTeam

Customer proof pointsCustomer proof points Funding statusFunding status


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Executive Summary TemplateExecutive Summary Template

Funding History:

Total Amount Raised to Date:Participants AmountIndividuals:VCs:Others:

Total Seeking:Committed Funds (If Any):Use of funds:

Milestones

Competition

Technology

Defensibilit

Company Overview:

Company Information:

Newco, Inc.Address :Phone:Fax:Website:EmailBasic Details:

Founded In:# Of Employees: 15 (X US / Y off shore)

Pain:

Solution:

Team:

Company founded ____ ___ Patents filed on ___ Product Introduction ____ $ in sales in x $ in sales in x+1 $ in sales in x + 2

Business Model

Financials:

Cumulative Revenue:Burn Rate: $Cash Flow Positive in: Year ?

3-Year Revenue Forecast:

Year 1: $Year 2: $Year 3: $

Funding History:

Total Amount Raised to Date:

Total Seeking: $

Committed Funds (If Any):

Use of funds: E

Valuation Expectations:

Tagline

Logo

www.bandangels.com


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How VCs VetHow VCs Vet

Your Exec SummaryYour Exec Summary Is the referral source credible?Is the referral source credible?

Is this company in my geography?Is this company in my geography? < 1< 1 --2 hours travel time2 hours travel time

Is this a scalable business?Is this a scalable business?

Is the team credible?Is the team credible?

Are the existing investors credible?Are the existing investors credible?

Can I possibly fall in love with the:Can I possibly fall in love with the: CEOCEO

Target marketTarget market Problem being solvedProblem being solved

The technology being developedThe technology being developed


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RejectionRejectionWe cant kiss all the pretty girls

-Bob Kagle, Benchmark


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Step 2: The PitchStep 2: The Pitch

GoalGoal: Get the second date: Get the second date

StrategyStrategy:: SketchSketchout a compelling,out a compelling,

exciting visionexciting vision

11

IntroductionIntroduction

22

The PitchThe Pitch

33

DueDue

DiligenceDiligence


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Pitch Advice is AbundantPitch Advice is Abundant---- and not duplicated hereand not duplicated here

Guy Kawasaki, Garage Technology VenturesGuy Kawasaki, Garage Technology Ventureswww.garage.com/resources/building.shtmlwww.garage.com/resources/building.shtml

Brad Feld, Mobius Venture CapitalBrad Feld, Mobius Venture Capitalwww.feld.com/blog/archives/2004/06/the_torturous_w.htmlwww.feld.com/blog/archives/2004/06/the_torturous_w.html

David Cowan, Bessemer Venture PartnersDavid Cowan, Bessemer Venture Partnerswhohastimeforthis.blogspot.com/2005/11/howwhohastimeforthis.blogspot.com/2005/11/how--toto--notnot--writewrite--businessbusiness--

plan.htmlplan.html

Sequoia CapitalSequoia Capitalsequoiacap.comsequoiacap.com/ideas//ideas/

SVASESVASEwww.svase.org/components/uploads/SVASE%2010%20Slide%20Template.www.svase.org/components/uploads/SVASE%2010%20Slide%20Template.pptppt


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Tell a Simple, yet CompellingTell a Simple, yet Compelling

StoryStory

Your StartYour Start--Up is everything to youUp is everything to you

But just another pretty face to the VCBut just another pretty face to the VC

VCs easily drown in detailsVCs easily drown in details

Boredom sets inBoredom sets in

Your goal is simple:Your goal is simple:

Get the next dateGet the next date

VC Start-Up


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Story Telling is a SkillStory Telling is a Skill Jerry Weissman Coach

to CEOs on an IPORoad Show


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The Story VCs Want to HearThe Story VCs Want to Hear Big MarketBig Market

Open to disruptionOpen to disruption

Customers in pain and who buyCustomers in pain and who buy

Growing order trendGrowing order trend

Strong product offering / technologyStrong product offering / technology Differentiated, protectedDifferentiated, protected

Successful TeamSuccessful Team

A PlayersA Players Successful Investors / Advisors / Board MembersSuccessful Investors / Advisors / Board Members


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Four Pillars to any VC PitchFour Pillars to any VC Pitch

++

TeamTeam TechnologyTechnology

ProductProduct

FinancialsFinancials

MarketMarket


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Market Size isMarket Size is

Every VCs ConcernEvery VCs Concern

% 2003 Corporate Tax Returns by Revenue

2.2% 1.9%

81.8%

0.5%

13.6%

0%

20%

40%

60%

80%

100%

< $1M < $5M < $10M < $50M >$50M

Revenue

Perce

ntof

5.4MReturns

Source: IRS.gov

VCGrade1:200

MarketMarket


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1.1. Market VettingMarket Vetting

CompetitionCompetition

VC clich: No competition = No MarketVC clich: No competition = No Market

Is there room for this startIs there room for this start--up?up? Is there any potential to grow fast?Is there any potential to grow fast?

Is the market big enough to maneuverIs the market big enough to maneuverif the first niche doesnt work out?if the first niche doesnt work out?

MarketMarket


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April, 2009April, 2009Copyright 2007, 2008, 2009 Robert W.Copyright 2007, 2008, 2009 Robert W.

DahlbergDahlberg 4343

Example: Competition / EcosystemExample: Competition / Ecosystem

RTLS/RFID

YMS

TMS

WMS

Custom Asset Mgmt

ERPOver The RoadTrailer/Tractor Tracking

Middleware/Fusion

Ekahau

Aeorscout

Laudis

Fluensee

SystemId

Retalix

Yardview

C3

RedPrairie Manhattan

OthersOracle

SAP

OAT

QualComm TrimbleSkyBitz

Zebra

NewcoAsset Control

Asset Location Asset Management

OracleWMS

Players

I2

BEA

Microsoft

MotorolaIBM

HPThingMagic

Impinj

Alien

Size of oval does not represent size of company but rather functional coverage in segment


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#1 Cause of Failure is#1 Cause of Failure isthe Lack of Customersthe Lack of Customers

Demonstrate you know your customer coldDemonstrate you know your customer cold

Theres a logical reason behind theTheres a logical reason behind the

customer listcustomer list Articulated customer segmentationArticulated customer segmentation

Strategic approachStrategic approach

List your marquee customersList your marquee customers

Show that customers are helpingShow that customers are helping

MarketMarket


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April, 2009April, 2009Copyright 2007, 2008, 2009 Robert W.Copyright 2007, 2008, 2009 Robert W.


Example: CustomersExample: CustomersManufacturing Retail

Logistics

Transportation


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2. Team2. Team

Show off your leadership aptitudeShow off your leadership aptitude

Personal results, personal successPersonal results, personal success

StartStart--up mentality vs. Big company mentalityup mentality vs. Big company mentality

Company pedigreeCompany pedigree worked at market leadersworked at market leaders Backed by blue ribbon advisorsBacked by blue ribbon advisors

Key: people investors trustKey: people investors trust

Expect your backgrounds to be rigorouslyExpect your backgrounds to be rigorouslychecked.checked.

TeamTeam


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April, 2009April, 2009

Copyright 2007, 2008, 2009 Robert W.Copyright 2007, 2008, 2009 Robert W.


Example: Corporate OrganizationExample: Corporate Organization

Disclose:Disclose:

Experience &Experience &HolesHoles

DavidEngineering

DougSales

MarkCFO

Bob CEO

TBHMarketing

11 Engineers

Cory2 Application

Engineers1 Marketing2 Salespeople

JoeCTO

Rob

33 P d TP d T


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3.3. Product Test:Product Test:

Aspirin or Vitamin??Aspirin or Vitamin??

The product has to be compellingThe product has to be compelling

Customer inertia is hugeCustomer inertia is huge

Customers change only when they have toCustomers change only when they have to Dont fix what isnt broke.Dont fix what isnt broke.

TechnologyTechnologyProductProduct

FF t


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Feature orFeature or

a Company?a Company?

A Feature?A Feature?

Can the incumbent add this feature to anCan the incumbent add this feature to an

existing product easily?existing product easily?

A Product?A Product? Part of a fullPart of a full--product portfolio?product portfolio?

A Company?A Company? Can the value prop create a substantialCan the value prop create a substantial

business?business?

TechnologyTechnologyProductProduct


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4. Financials4. FinancialsFinancialsFinancials


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Cash is KingCash is King

Revenue forecast will likely not materialize, SoRevenue forecast will likely not materialize, So

Is this plan realistic?Is this plan realistic?

Revenue must not be too big, but not too smallRevenue must not be too big, but not too small

Spending plan will be scrutinized.Spending plan will be scrutinized.

Cash is KingCash is King

Successful CEOs are frugalSuccessful CEOs are frugal

FinancialsFinancials


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Sequoia Capitals Directive to CEOs 10/2008

O OE l HOW WE MAKE MONEY


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Example: HOW WE MAKE MONEYExample: HOW WE MAKE MONEY

PRODUCT

ON-DEMAND

$

Newco 1.0SAME PRODUCT

3 REVENUE STREAMS

ECU/hours

NewcoDELPLOYED IN APUBLIC CLOUD

NewcoDELPLOYED IN APUBLIC CLOUD

APPLICATIONDELPLOYED IN APUBLIC CLOUD

APPLICATIONDELPLOYED IN APUBLIC CLOUD

$ Additional ECUs

Licensed Server

ENTERPRISE

DELPLOYED ATCUSTOMER SITE

DELPLOYED ATCUSTOMER SITE

APPLICATIONDELPLOYED IN A

PRIVATE or PUBLICCLOUD

APPLICATIONDELPLOYED IN A

PRIVATE or PUBLICCLOUD

Newco 2.0 On-Premise Q4 2008$

Newco X

Newco X

Newco X

Example: BUILD + SELLExample: BUILD + SELL


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Example: BUILD + SELLExample: BUILD + SELL

Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8

On-demandLAMP

VMWareBeta

MySQL

Postgres

EDB

AmazonPlatform

EDB PrivateBranding

V2.0 ReleaseOn-premise

Glassfish

Tomcat

OLAP/DWBundle

LicenseServer

3-6 NewComponents

3-6 NewComponents

3-6 NewComponents

3-6 NewComponents

2-3 CoreEnhancement

s

Xen? MSFT?

2-3 CoreEnhancement

s

2-3 CoreEnhancement

s

2-3 CoreEnhancement

s

VMWareProduction

1 2 3 5 5 6 63

$0.3 $0.6 $1.2 $1.2 $1.5 $1.5 $1.8 $1.8

1 2 3

$0.75 $0.75 $1.5 $2.25 $3.0$2.25$0.75

ENGINEERINGTEAMS

SALESTEAMS

PRODUCT

4

JBoss

0925

36 4568 68

79 79

TOTALTEAM

EMPLOYEES

COST($M):

REVENUE ($M):

PRODUCT


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The Morning After The Morning After


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What Can You Do?What Can You Do? React to the business advice you receivedReact to the business advice you received

Adjust as necessary, your business strategyAdjust as necessary, your business strategy Polish your pitch for the next VCPolish your pitch for the next VC

Incorporate learning from each interactionIncorporate learning from each interaction

Simplify, SimplifySimplify, Simplify

Clarify confusing pointsClarify confusing points

Address objection itemsAddress objection items

Rearrange the slide orderRearrange the slide order


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What Will Most VCs Do?What Will Most VCs Do? Best case: Fast no, slow yesBest case: Fast no, slow yes

Typical: Innocuous turn down, if at allTypical: Innocuous turn down, if at all They dont want to burn any bridgesThey dont want to burn any bridges

Typical: No urgencyTypical: No urgency Risk reduces as time passesRisk reduces as time passes

Wait for a milestoneWait for a milestone

quarter resultsquarter results prototype worksprototype works


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RejectionRejection Accept rejection gracefullyAccept rejection gracefully

There is no rationale argument to bring theThere is no rationale argument to bring theVC backVC back


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What Might Happen?What Might Happen? When a VC senses love, youll hear backWhen a VC senses love, youll hear back

Be responsive!Be responsive! VCs like working with responsive peopleVCs like working with responsive people

Youre building a relationshipYoure building a relationship

Respond to requestsRespond to requests < 24 hours< 24 hours


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Step 3: Due DiligenceStep 3: Due DiligenceGoalGoal: Receive a term sheet: Receive a term sheet

StrategyStrategy: Two way test drive: Two way test drive

ApproachApproach The PitchThe PitchDueDue

DiligenceDiligence


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Prepare in AdvancePrepare in Advance Executive resumes & referencesExecutive resumes & references

Line up references in advance,Line up references in advance, Contact people VCs will findContact people VCs will find

Financial QuarterliesFinancial Quarterlies

Capitalization tableCapitalization table

Customer / technology referencesCustomer / technology references

Keep them updated on your progress,Keep them updated on your progress, Use them judiciouslyUse them judiciously


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Typical Due Diligence ProcessTypical Due Diligence Process1.1. More informationMore information (Exec. resumes, financials, cap(Exec. resumes, financials, cap

table, personal references, etc.)table, personal references, etc.)

2.2. Meet with VCs expert(s)Meet with VCs expert(s)

Portfolio companies, friends, paid expertsPortfolio companies, friends, paid experts

3.3. Follow up meeting(s) at your officeFollow up meeting(s) at your office4.4. Calls to customers and personal referencesCalls to customers and personal references

5.5. Calls to backCalls to back--channel referenceschannel references


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Remember VCs come with CostsRemember VCs come with Costs

Fund raising takes time away from serving customersFund raising takes time away from serving customers

False sense of security: it masks viabilityFalse sense of security: it masks viability

Money enables costly mistakesMoney enables costly mistakes Money removes spending disciplineMoney removes spending discipline

Adds additional master(s)Adds additional master(s)

You give up a lot of ownershipYou give up a lot of ownership

Sets the exit strategy and timingSets the exit strategy and timing

Source: Greg Gianforte, CEO RightNow, http://cet.berkeley.edu/Resources/CETLectures.html

So Use Due Diligence as aSo Use Due Diligence as a


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gg

Two Way Test DriveTwo Way Test Drive Can I work with this team / VC for the nextCan I work with this team / VC for the next

6 years?6 years? Is this a quality team / VC?Is this a quality team / VC?

Do team / VC listen?Do team / VC listen?

Is the team/VC honest, ethical, reliable?Is the team/VC honest, ethical, reliable?

dependable?dependable?

How do they react being under fire?How do they react being under fire?

Syndication:Syndication:


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yy

Two Parents are Better than OneTwo Parents are Better than One For the entrepreneurFor the entrepreneur

More strategic minds around the tableMore strategic minds around the table Hedge against one VC walking outHedge against one VC walking out

For the VCFor the VC Validates that the start up has legsValidates that the start up has legs

More powder availableMore powder available


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Getting MarriedGetting Married Locate a SyndicateLocate a Syndicate

PartnerPartner

Term SheetTerm Sheet

Legal due diligenceLegal due diligence

Cash in the bankCash in the bank

And RememberAnd Remember


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Venture Capital Isnt RequiredVenture Capital Isnt Required BroadcomBroadcom

No VC moneyNo VC money

CiscoCisco

$5M in revenue, profitable before Sequoia$5M in revenue, profitable before Sequoiainvestedinvested

DellDell

Raised money at $60M in revenueRaised money at $60M in revenue

eBayeBay

$4.5M in revenue and profitable before$4.5M in revenue and profitable beforeBenchmark investedBenchmark invested

MicrosoftMicrosoft

VC funded after being profitableVC funded after being profitable

The MathWorksThe MathWorks

>$300M in revenue, no VC money>$300M in revenue, no VC money

OracleOracle Government contract funded first productGovernment contract funded first product

SAS InstituteSAS Institute

> $1.9B in revenue, the largest private software> $1.9B in revenue, the largest private softwarecompany, no VC moneycompany, no VC money

SiebelSiebel

Customers funded first productCustomers funded first product


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Entrepreneur ResourcesEntrepreneur Resources Law firm outreachLaw firm outreach DLA Piper Venture PipelineDLA Piper Venture Pipeline

www.venturepipeline.comwww.venturepipeline.com

Fenwick & West LLPFenwick & West LLP

Darrell Kong

Orrick, Herrington & Sutcliffe LLPs Total AccessOrrick, Herrington & Sutcliffe LLPs Total Access"Chad Lynch" "Chad Lynch"

Pillsbury Winthrop Shaw Pittman LLPs Back Stage PassPillsbury Winthrop Shaw Pittman LLPs Back Stage Pass

[email protected]@pillsburylaw.com

Wilson, Sonsini, Goodrich, and RosatiWilson, Sonsini, Goodrich, and Rosatiwsgr.com/WSGR/Display.aspx?SectionName=practice/venturecapital.hwsgr.com/WSGR/Display.aspx?SectionName=practice/venturecapital.htmtm

SDForumSDForum

www.sdforum.orgwww.sdforum.org Silicon Valley Banks Venture ExchangeSilicon Valley Banks Venture Exchange

Shai Goldman, Director, [email protected] Goldman, Director, [email protected]

SVASE,SVASE, Silicon Valley Association of Startup EntrepreneursSilicon Valley Association of Startup Entrepreneurs..

www.svase.orgwww.svase.org The Enterprise Network of Silicon ValleyThe Enterprise Network of Silicon Valley

Tensv.orgTensv.org

Womens Technology ClusterWomens Technology Clusterwww.wtcwww.wtc--sf.orgsf.org


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To Your New VentureTo Your New Venture

Success!Success!

insiders view on how to raise vc capital.dahlberg_cet_ucb.2009-04-13

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