navigating the funding process...reasons to get funded startup growth diversification acquisition 3...
TRANSCRIPT
Navigating the Funding Process Robert Delman, MBA ’98 Astia - Vice President, NY
Columbia Business School Women Entrepreneurs Network
Columbia Business School Entrepreneurs Network March 8, 2011
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Which is more important to an investor – The Entrepreneur or “The Idea?”
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4F's Angels VC's Private Equity
The Entrepreneur The Idea
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Reasons to get funded
Startup Growth Diversification Acquisition
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This is who you raise capital from 4F’s – Friends, Family, Founder and Fools -
convertible debt or common equity Bank/SBA - debt Gov’t Agencies and Economic Development
Zones - usually debt or grant Customers Outside investors , i.e. Angels and VC’s -
preferred equity
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Stages to seek Angel or VC Funding
Beta Launch “Traction” – what does that mean Customers – could be free It is ok to constantly iterate
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How much money you need
Enough for Alpha or Beta Establish proof of concept Reach a significant milestone Break even
Please don’t say your numbers are conservative!
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Why someone will invest in your business
You have an understandable business and revenue model – “granny test”
How will you acquire customers and at what cost Recurring revenue model and multiple revenue
streams Extremely large addressable market - $1B Coachability We like serial entrepreneurs – successes and failures DO WE LIKE YOU!
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NO B!@#$%^T BINGO Bandwidth Deploy Robust Runway Synergistic
Curated Will sell to Google Freemium Community Long-Tail
360 degree integration Pipeline
B!@#$%^T BINGO
free square Exit Sustainable
Symbiotic Monetize Synergistic Ecosystem Viral
First mover advantage Ramp Up User-
Centric Web 3.0 Best Practices
What to look for in an investor
Past investments in your space Is investor geographically sensitive Do they have “dry powder” Do they have sector experience and contacts Can you work with them “post-honeymoon” What are their return expectations
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How do you approach an investor Get your 60 second pitch down – practice,
practice and practice again!!! Make them love you AND your idea! Provide regular email updates Use LinkedIn and your CBS alumni network Tell them about your quality Advisory Board Cold calling rarely works Be interesting and tell the investor something
about you!
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Where we hang out Investors tend to invest in entrepreneurs who
are referred by other entrepreneurs or investors they know
Friend and immediate contacts Angelsoft, CapLinked, AngelList Go to every VC and investor conference you
can with a 60 second pitch and business cards – not business plans!
Know when the conversation is over
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“How do I look”
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Appearance and Grooming Bad breath and sweaty hands are a turn-off Dress like an entrepreneur but not like a
homeless person Respect the “2-foot” rule of personal space –
get out of my face Firm shake and eye contact are essential as
they are the first impression
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Does your investor presentation look like this - KISS
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Due Diligence – Be Prepared
Remember it is two-way Long checklists Redundant questions Time consuming and overwhelming Will it ever be over When will I get to run my business Have one partner focused on it
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Co-Working Space
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The Brooklyn Makery
Incubators / Accelerators
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Resources Angel Capital Association AngelList Angelsoft CapLinked TheFunded Funding Post FundingRoadMap The Hatchery The Kauffman Foundation National Venture Capital Association NYEW Venture Hacks
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The Lang Center!
